BIMETALLISM

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BIMETALLISM

BY

A. vl. UTLEY

Author of "Free Coinage," "Financial Catechism,1
"Cause of Hard Times" etc., etc.

LOS ANGELES

FISK & HORNBECK

PRINTERS

1899

COPYRIGHT
1899

Bv A. d.UTLEY

TABLE OF CONTENTS

Reference is to Sections.

I. HISTORY OF THE PRECIOUS METALS i- is

II. COST OF THE PRECIOUS METALS 16- 26

III. RATIO BETWEEN THE METALS 27- 44

IV. EXPORTATION OF THE PRECIOUS METALS 45- so

V. OVER-VALUATION IN THE UNITED STATES si- 57

VI. CONSUMPTION IN THE ARTS 58- 74

VII. VALUE 75- 86

Vlll. VALUE OF THE PRECIOUS METALS .'. 87- 94

IX. INFLUENCE OF LAW ON VALUE 95-103

x. BIMETALLISM 104-143

XI. ADVANTAGES OF BIMETALLISM 144-163

XII. BIMETALLISM IN FRANCE ".164-178

XIII. GOLD STANDARD IN ENGLAND 179-134

XIV. DEPRECIATION OF SILVER 135-200

XV. INFLATION OF PRICES FROM BIMETALLISM 201-229

xvi. PARITY OF EXCHANGE 230-232

XVII. DEMONETIZATION 233-260

XVIII. BIMETALLISM IN THE UNITED STATES 261-304

XIX. THE UNITED STATES ON A SILVER BASIS 3os-3is

XX. MEXICO AND SILVER MONEY 319-365

xxi. APPENDIX 366-416

20029S9

PREFACE

A discussion of the question of Bimetallism
necessarily embraces, to some extent at least,
the larger question of money. The money
question is of almost infinite importance, and
there is great diversity of opinion as to the
essential elements of money. Alexander Del
Mar, in the closing paragraph of his History
of Money in Ancient Countries says: "That
which has engaged the attention without
harmonizing the convictions of such master
minds as Aristotle, Plato, Tycho Brahe,
Copernicus, Locke, Newton, Smith, Mill and
Spencer is surely a study which no man can
afford to approach with rashness, nor leave
with complacency. When the principles which
underlie it are thoroughly understood, money
is perhaps the mightiest engine to which man
can lend his guidance; unheard, unfelt, almost
unseen, it has the power to so distribute the
burdens, gratifications and opportunities of
life that each individual shall enjoy that share
of them to which his merit entitles him, or to
dispense them with so partial a hand as to
violate every principle of justice and perpetu-

PREFACE

ate a succession of social slaveries to the end
of time. ' '

I do not expect that all who read the follow-
ing pages will agree with me in my con-
clusions, but I think all will admit that the
money question is "A study which no man
can afford to approach with rashness, nor
leave with complacency. ' '

All I ask is that he examine the authorities
cited and the reasons adduced in support of
the conclusions reached. If the authorities do
not justify the premises, if the reasoning is
falacious, if the conclusions are not warranted
by the evidence, of course they should be
rejected. But, if the premises are reasonable,
are sustained by authority, the reasoning
logical and the conclusions warranted, and if
the reader has previously entertained opinions
at variance with such conclusions, I think I
have the right to expect that he will make
further investigations, and that he will not
accept the party platform of any political
party as infallible. And if, on further
investigation, he shall discover the truth, I
think I have a right to expect that he will
fearlessly proclaim ijt and follow wherever it
may lead. A. j.

Los Angeles, Cal., December, 1899.

CHAPTER I.

HISTORY OF THE PRECIOUS METALS.

SEC. 1. A careful study of the history of the precious
metals will conclusively show the effects of a plentiful as
contrasted with a limited supply of money, and the
consequences resulting from expanding or contracting the
volume of money. It will establish beyond controversy
the fact that money is quantitative, that its value, as
measured by commodities, (and money has no other value)
other things remaining the same, will fall, as its quantity
is increased, and will rise as its quantity is diminished,
and also the further fact that with an increasing volume
of money times will be good, business prosperous, and the
people contented and happy; while on the other hand
with a contracting volume of money industry will languish,
willing workers will be relegated to idleness, tramps will
be multiplied, poverty and misery, crime, suicide, and
insanity will be largely increased, and money will retire
from circulation, or will be hoarded, or collected in the
great money centers.

SEC. 2. The above facts are very cleary and forcibly
illustrated by that distinguished economist and historian,
Alexander Del Mar, in his " History of the Precious
Metals," published by George Bell & Sons, in London,
in 1880. I quote from this publication a Table showing

8 BIMETALLISM

population, and the per capita circulation of money in the
Western World for the several periods intervening
between 1493 and 1879, compiled from estimates made
by trustworthy statisticians. In connection with this
table, I also quote from Del Mar's comments on the facts
shown by the table a brief resume of the effects, morally,
socially, and politically, claimed by Del Mar to have been
produced by the contractions and expansions of the volume
of money that had taken place. Without doubt, Del
Mar's conclusions are correct. There certainly can be
no doubt of the fact that the periods of progress and
development were coincident with an increasing (per
capita) volume of money, while on the contrary, periods
of arrested development, depression in business; when
civilization stood still or went backwards, were coincident
with a contracting volume of money. (See " History of
Precious Metals," pp. 203-205).

SEC. 3. " Table showing the estimated stock of Gold and
Silver Coins and the Population of the European World
from time to time since the Discovery of America. "

Period
A. D.

Authority for
Population

Population

Authority for I Stock of
Stock of Coin j Coin

Stock per
Capita

£ s d

1492

Estimate

40,000,000

Jacob

£34,000,000

Ol6o

I636

Estimate

80,000,000

Estimate

240,000,000

3 00

1690

Petty-Jacob

85,000,000

Jacob

250,000,000

3 oo

1700

Voltaire

90,000,000

Jacob

297,000,000

3 60

1776

Voltaire

110,000,000

Jacob

275,000,000

2 80

1808

Humboldt

200,000,000

Jacob

380,000,000

I 18 o

1828

Balbi

240,000,000 Jacob

313,000,000

6 o

1838

Humboldt

260,000,000 ; Estimate

270,000,000 o o

1839

MacCulloch

265,000,000

Storch

284,000,000 o o

1850

Putnam

300,000,000 'MacCul'ch

400,000,000 7 o

1860 Sta. Journal

330,000,000 ; Estimate

560,000,000 14 o.

1870 iBehm&Wag 370,000,000 Seyd
1877 Behm&Wag, 400,000,090 Estimate

720,000,000 18 o
700,000,000 15 o

1879 Estimate 410,000,000

Estimate

650,000,000 12 0

HISTORY OF THE PRECIOUS METALS 9

SEC. 4. Del Mar commenting on the facts shown by
the tables says:

" The fact that the stock of coin in 1776 is put at less than that
in 1700 may lead to doubt of its correctness; but it seems to be well
authenticated that until the development of the great silver lodes of
Biscaina, Sombrerete, and Valenciana, in Mexico, towards the end
of the last century, the supplies of the precious metals were not
only inadequate to the demands of commerce, but that the stock of
coin in Europe and America absolutely declined. The falling-off of
the stock from 1808 to 1839 has been admitted by Humboldt, Jacob,
MacCulloch, Tooke, and other writers on the subject.

" Referring now to the general and comparative aspects of the
foregoing table, it will be observed that at the period of the
discovery of America the Western World started with a stock of
coin amounting to about 16s. per head of population, and that this
proportion continued to increase until the opening of the eighteenth
century, when it amounted to £3 6s. per capita.

" During this period, discovery and commercial adventure were

stimulated to the extremest limits. The seas and bays of the

'entire world were explored, commerce was extended into the

Americas, Africa, India, China, Japan, and the islands of the South

Sea, and colonies were founded all over the world.

" The social organism was stimulated into the greatest activity.
This was the period of the Revolution, Habeas Corpus Act, and
Bill of Rights, in England; of the numerous risings of the peasantry,
the Edict of Nantes and the Fronde in France; of the Republic in
the Netherland; of the Protest and Thirty Years' War in Germany;
and of the Reformation throughout Western Europe generally.

"After this period the stock of coin diminished from £3 6s. per
capita in 1700 to £2 8s. per capita in 1779, =£1 18s. per capita in 1808,
£1 6s. per capita in 1828, and £1 per capita in 1838. It is noticeable
that coincidently with the fall of the stock of coins the Western
World exhibited all the marks of arrested development and social
perturbation.

" This was the period during which all the great national debts
arose; when France, England, Russia, Germany, the Papal States,
the American Colonies, the United States, Brazil, and many other
countries, suspended specie payments, and when Europe and

America were almost constantly shaken with insurrections and
wars. ********

10 BIMETALLISM

" Before the eighteenth century the stock of coin and of money
was the same, for there was little circulating paper in Europe
beyond the confines of the Italian republics. After the beginning of
the eighteenth century the stock of coin was not the same as the
stock of money, but only the basis of it. At that time the Bank of
England began to issue circulating notes, and this example was
soon followed by other institutions. *

" Of the stock of coin estimated to have been in existence in 1870
about one-third consisted of silver. The demonetizations of this
metal which since that date have been effected in several of the
leading countries of the world, have resulted in reducing the general
stock of coin, which, at the present time [1880], is something below
the amount in 1877. The progress of the demonetization of silver
threatens to reduce this stock still further, and the present tendency
is therefore toward a smaller stock of specie in the European World."

The comparative yield of the great gold fields of the
modern world are estimated by our best statisticians as
follows:

COUNTRY

Japan....

Period during which the produc

was not generally less than

j£i, 000,000 a year.

Total product of j
Gold from be- jSame in Dollars

1580 to 1639—60 years

ginning to end i

£ 40,000,000 !$ 200,000,000

Brazil ' 1710 to 1789 — 80 years j 180,000,0001 900,000,000

Russia 1840 to 1878 — 39 years j 160,000,000! 800,000,000

California 1848 to 1878 — 31 years | 220,000,0001100,000,000

Australia 1851101878 — 28 years i 24o,ooo,ooo; i 200,000,000

| Total I 84o,ooo,oooi4 200,000,000

(See Del Mar's History of Precious Metals p. 172).

SEC. 6. The coinage value of the world's production
of the precious metals since the discovery of America has
been carefully estimated by many very eminent statisti-
cians, a few of the most illustrious of whom I will quote:

SEC. 7. Baron Von Humboldt estimates the gold and
silver produced in America from 1492 to 1800. as follows:

Gold =£393,120,000

Silver 745,260,000

Total =£1,138,380,000

HISTORY OF THE PRECIOUS METALS 11

SEC. 8. Jacobs, in his " History of the Precious Met-
als," estimates the world's production from 1492 to 1809
at ;£l, 360,000, 000; amount produced outside of America
at ^137,000,000; American production ;£l, 223,600,000.
SEC. 9. Jacob estimates consumption as follows:

Exported to Asia £399,000,000

Consumed in Arts and Manufactures 440,000,000

Loss by abrasion and Casualty 175,000,000

Coinage for Europe and America 346,600,000

To which add £33,400,000 stock on hand in 1492 33,400,000

Gives a total money volume for 1808 of £380,000,000

Equals $1,900,000,000 as the Western World's stock of coins in 1809.

SEC. 10. Mr. Danson in an article published in the
London Statistical Journal, estimates the production for
America from 1492 to 1803 at ^1,122,000,000. Deduct-
ing from this ^25,600,000 for the production for 1801 to
1803, and we have as the production prior to 1801,
^1,096,400,000.

SEC. 11. These several estimates made by eminent
statisticians are very close together and unquestionably
approximate very nearly the actual production of the
precious metals in America prior to 1801.

SEC. 12. Estimates have been made of the production
of gold and silver in America, Europe, Africa and Aus-
tralia since the commencement of the present century, up
to and including 1877, by Humboldt, Raynal, Duport,
Brogniart, Ward, Jacob, Danson, Tooke, Birkmyre, Mac-
Culloch, Sir Hector Hay, Blake, Del Mar, Soetbeer,
Sauerbeck, and in various official reports and statistical
journals; some of the estimates, however, only cover a
part of the time, but they substantially agree that the
production of silver within that time amounted to about
^548,000,000 ($2,740,000,000) and that of gold to
about ^796,000,000 ($3,980,000,000).

12 BIMETALLISM

SEC. 13. Prior to the middle of the present century
the gold and silver mines of the world were worked
almost exclusively by slave labor. The kings of Egypt
not only condemned criminals and those accused of crime
to perpetual slavery in the mines, but also their relatives
and personal friends. The Romans for a long time worked
the silver mines of Spain with slaves and the average
daily production was only about 5^d. per man, which
could not much more than have covered incidental
expenses. The wars between Carthage and Rome were
mainly for the possession of the silver mines of Spain.
The expeditions of Hannibal and Hamilcar in Spain, of
Caesar in Gaul, of Cortez in Mexico, of Pizarro in Peru,
were all undertaken with the object of acquiring the
precious metals. (See Del Mar's " History of the Pre-
cious Metals," pp. 14 to 27).

SEC. 14. During the reign of Philip IV., 1621-55,
while there was a large amount of silver bullion in Spain,
there was but very little silver money. At that time
Spain levied a tax of 20 per cent, on the production of
silver, 5 per cent, convoy duty and 5 per cent, seignorage
on coining. There were many other onerous charges.
Many of the wealthy Spaniards on receiving remittances
of silver bullion from America', instead of having it coined
into money had it converted into plate and stored it in
vaults or other safe places for future use.

SEC. 15. Madam d' Aunoy, who wrote in the reign of
Philip IV., states that the Duke of Albuquerque possessed
1,400 dozen dinner plates, fifty great salvers and 700
dishes of exceedingly massive silver; while the Duke of
Alva, who was rather poorly supplied, as things then
stood, had 600 dozen plates and 800 dishes.

The Due de Saint Simon (who wrote during the early
part of the eighteenth century) mentions that the palace

HISTORY OF THE PRECIOUS METALS 13

of the Duke of Albuquerque was furnished with suites of
splendid furniture of which the frame work, instead of
being of wood, was of massive silver. Del Mar, in com-
menting on the above facts in his "Money and Civiliza-
tion" (page 99), and on the disappointment of Philip at
the failure of the wealthy Spanish nobility to bring their
silver bullion to the mint, says:

" He forgot that it was not the interest of the wealthy classes to
promote a rise of prices. They had seen enough of that in England,
where the consequences had been a renunciation of the Catholic
faith, the execution of the king, and the establishment of a Puritan
commonwealth. What the Spanish grandees wanted was not rising
prices, but falling ones, and so, instead of sending their bullion to
the mint, they continued to pile it up in their vaults, awaiting the
inevitable hour when, from increasing scarcity, each ounce of it,
when coined into money would purchase twice as much of commod-
ities as before."

CHAPTER II.

COST OF THE PRECIOUS METALS.

SEC. 16. Jacob, in his " History of the Precious
Metals," says that from the dissolution of the Western
Empire until the discovery of America the precious metals
were sought not by exploring the bowels of the earth but
by the more summary process of conquest,, tribute and
plunder. Del Mar thinks that the same principles
obtained until the discovery of the mines of California
and Australia, and that practically there was no free
mining of the precious metals prior to that time, and that
economic maxims based on the production of the precious
metals prior to 1848 are of but very little value.

SEC. 17. Some economists have contended that the
value of the precious metals was determined by the cost
of their production. Adam Smith, in the "Wealth of
Nations," (page 138) contends that the price of the
precious metals all over the world is determined by their
price at the most fertile mines. John Stuart Mill follows
Adam Smith, but says that the production to have that
effect must be in a state of freedom. Mill, however, in
other parts of his "Principles of Political Economy,"
repeatedly says that the value of money is determined
by its quantity, and that as the quantity is increased,
other things remaining the same, its value will diminish
and as its volume is diminished its value will increase,
and as this proposition is directly at variance with the

COST OF THE PRECIOUS METALS 15

other, and as the last proposition is sustained both by
history and well recognized economic principles, and the
former proposition is contradicted by facts as well as
reason, we must accept the second proposition as being
true and reject the former.

SEC. 18. While it is true of commodities (such for
example as manufactured articles, which may be produced
in unlimited quantity), that their value depends largely
on the cost of their production; and while to a less extent
it is also true of agricultural products, it is not true of the
precrous metals. Commodities, the value of which is
largely controlled by the cost of production, are almost
immediately consumed or wasted and when wanted again
must be reproduced. This is not true of the precious
metals; they survive the date of their acquisition. Much
cf the stock now on hand we have acquired by inheritance
from ages long past. They were produced by slave labor
or acquired by conquest or plunder. The cost of their
production was not controlled by any economical principle,
and the gold and silver now produced under free labor
enter into and become a part of the general stock and
their value is modified by the value of that produced in
ages long since past, as the value of that so produced is
modified by the present production.

SEC. 19. Under circumstances of entire freedom in
the laws concerning the production and coinage of the
precious metals, and supposing, like manufactured com-
modities, they could always be obtained by labor devoted
to mining, and supposing, also, that there was no
accumulated stock to influence the question, and no law
creating artificial demands for these metals, or for either
of them, the cost of production would undoubtedly have
an important bearing upon their value; as the case
stands, however, the cost of production has so little to do

16

BIMETALLISM

with the matter that for all practical purposes it need not
be considered at all.

SEC. 20. Mr. Lewis Garnett, formerly manager of
the San Francisoco Refining Works, in a pamphlet
published in 1869, says that the labor alone employed in
the production of gold in California at that time [1869]
cost more than two dollars for every dollar's worth of gold
produced, to say nothing about the expensive machinery
used, salaries of officers, etc.

SEC. 21. Del Mar, from estimates carefully made from
facts obtained from personal inspection of all the mines of
importance in California, estimates the expense of the
gold production from 1848 to 1856, both inclusive, as
follows: (See " History of the Precious Metals,"
page 262).

Year

Workers

Local price of
each man's labor
per day

Value of their combined
labor for the year
of 300 days

Product of gold,
mint value

1848
1849
1850
1851
1852
1853
1854
1855
1856

5,000
22,500
115,000
120,000
130,000
140,000
150,000
160,000
150,000

=£3 Os. Od.
300
28 0
200
1 12 0
180
14 0
100
16 0

£ 4,500,000
20,250,000
82,800,000
72,000,000
62,400,000
67,200,000
54,000,000
48,000,000
36,000,000

£ 2,000,000
8,000,000
10,000.000
11,000,000
12,000,000
13,000,000
12,000,000
11,000,000
11,000,000

447,150,000

90,000,000

SEC. 22. From the above table it will be seen that
even in the flush times of California mining, gold was
produced on the average at a loss,, saying nothing about
the great destruction of the forests and injury done to
the land.

A carefully prepared estimate of the cost of the produc-
tion of gold in Australia makes about the same showing.

SEC. 23. That certain adventures afford enormous
profits there is no doubt, but many more are operated at

COST OF THE PRECIOUS METALS 17

a loss. Del Mar's " History of the Precious Metals,"
page 290, refers to two hydraulic companies, one of
which, employing ten men at 16 shillings per day each,
and 200 inches or 4,000 gallons of water, washed down
224,000 cubic feet of earth in six days, and though there
was obtained from it only ^600 in gold (about five-
eighths of a penny to the cubic foot, ) ^"470 of it was
profit. The other company referred to used "2,000
inches or 40,000 gallons of water for 100 days, and
washed down 1,000,000 cubic yards of gravel (containing
less than a quarter of a penny to the cubic foot), and
obtained p£6,400, of which ^2,400 was profit. The cube
of earth washed down was 1,100 feet long, 300 feet wide,
and 80 feet deep."

SEC. 24. Mr. Burchard (formerly Director of the Mint),
in his essay on the cost of the production of gold and
silver, takes certain selected mines and estimates the
cost of production for a single year and assumes this to
be the average cost of production. Mr. Burchard knew
better. His conclusions are misleading and untrue.
The cost of producing gold or silver cannot be determined
from one year's experience of certain selected mines;
but only " From the average cost of the total production
from all of the mines during a reasonably long period of
time;" and to this should be added the cost of prospecting,
sinking useless and abandoned shafts, and various other
incidental expenses incurred in locating mines whether
productive or otherwise. Neither is it true as contended
by certain pseudo economists that as the value of the
precious metals fell it would result in closing all but the
richest mines. Mines are not abandoned or closed when
they cease to be profitable. If abandoned by one set of
operators they are seized upon and operated by other
men in the hope that they may be more successful than

18 BIMETALLISM

the former proprietors, and that they will reach the great
bonanza which they are confident lies hidden in the rocks
almost within reach. It is the gambling instinct of man
that provokes the hazard.

SEC. 25. Mr. Garnett in the essay hereinbefore quoted
from is unquestionably correct when he says:

"The fact is, that the production of the precious metals has
always been one of those fascinating pursuits which the love of
venture as well as adventure inherent in man, seems to create, and
which the romantic and exciting vicissitudes in individual fortunes,
to which it not infrequently gives rise, continues to excite and
sustain; and such seems to have been pretty much the case at all
times and in all countries."

SEC. 26. That the additions to the present stock of the
precious metals produced today under free labor must go
into the common mass, and that its value is necessarily
influenced by the precious metals obtained by the ravages
of Caeser in Gaul, of Scipio in Spain, of Alexander, of
Darius, and by the plunders and robberies of Cortez
and Pizarro in Mexico and South America, there can be
no doubt; and that it is the quantity of the precious
metals, no matter how or at what cost acquired, now in
use as money, modified by the paper, token and other
fiduciary money, that determines the value or purchasing
power of money, is a fact universally admitted by all
well informed men. A nugget of gold picked up by a
hunter in the woods that cost no labor, has precisely the
same value as an equal amount of gold obtained by the
miner from the bowels of the earth at immense cost and
labor. The cost of the production of the precious metals
has absolutely no influence upon their value only as it
may tend to increase or diminish the supply. As the
supply, in proportion to the demand, increases, the value
falls, and as the supply in proportion to the demand
diminishes, the value rises.

CHAPTER

RATIO BETWEEN THE METALS.

SEC. 27. That the ratio between the relative values of
the precious metals in their use as money is purely an
arbitrary one established and maintained by law; that the
ratio between them has been repeatedly changed by low-
ering or raising the relative value of first one and then the
ether by legal enactment or arbitrary decree; and that
the annual production of either of the metals, nor the
accumulated stock of either, as money, or as bullion, or
in hoards, or as all combined; nor the past, present, or
prospective cost of either of them, exerts no influence
whatever over their relative value is a fact well authen-
ticated by history.

SEC. 28. Alexander Del Mar, in his " History of the
Precious Metals," page 230, says:

" Supposing that the combined nations of Europe and America
decreed and remained steadfast to the decree that the ratio of gold
and silver should thenceforth be as 1 to 1, it is difficult to conceive
how this ratio could ever be changed, either by the operation of
quantity, mint charges, or any other influence. Relative demand of
the precious metals for arts could not change it, for even supposing
that everybody preferred gold plate to silver — a preference which
under such circumstances cannot be admitted — this would not
change the ratio. As no atom of gold could become money again,
except at a par with silver, it is impossible to imagine that any
scarcity of the one metal, or plentifulness of the other, could impair
their equal value. It would not matter, if, other things aside, gold

20 BIMETALLISM

were preferable to silver for use in the arts or not. The law of
nations, making them, when coined, equal as money, and all con-
tracts dischargeable, all debts payable in the same weight of one as
the other; and a conversion of both, from'coin to bullion, and from
bullion to coin, being unlimited, and subject to the same terms of
seigniorage, it necessarily follows that their value would be the same.
Nor could the vicissitudes of production effect a change in the ratio.
Though but a pound of gold a year were produced against millions
of pounds of silver, still would the ratio remain unchanged. Nobody
would pay more than a pound of silver for a pound of gold, when
the former could discharge the same amount of indebtedness, past,
present and future. Nor would the demands of commerce change
it. If debts were due from one country to another, the shipment of
one metal would answer all the purposes which could be subserved
by a shipment of the other, seeing that both metals, when coined
would be equally legal tender in all countries and that coinage
everywhere would be unlimited, and subject to the same charges for
both metals. Nor would the condition of the stock on hand alter
the ratio. Although this stock consisted nearly entirely of silver,
and very little of gold, still would a pound of silver always buy a
pound of gold, so long as the universal law rendered the one
equally as effective as the other in the payment of debts. The mar-
ket and the legal prices would always be the same."

SEC. 29. Del Mar in his "Money and Civilization,"
published in London in 1888 (page 104), after discussing
the demonetization of silver by Prussia and its probable
effect on the value cf silver says:

" Had France and the United States not also closed their mints to
silver, even this action of Prussia would apparently have had no effect
upon its value; but France, out of hatred for her victorious enemy,
unwisely refused to coin its rejected silver, and this proceeding was
rendered effective by the clandestine alteration of the mint statutes
of the United States."

SEC. 30. I also quote from the same book, page 129,
the following:

"At the beginning of the century [sixteenth century] the ratio of
the precious metals in the coinages of Spain was 13^ for 1, and

RATIO BETWEEN THE METALS 21

owing to the fact that Spain was then the principal coining nation
of the world, she was able to determine the ratio for all other
nations. In other words, 13 1/$ had become the 'merket' rate for
the commercial world, because it had previously been made the
legal rate in the foremost coining country of the time. This posi-
tion it was soon for Portugal to assume. The Spaniards had found
no great placer fields in New Spain; the Portuguese found one in
Brazil; and as gold in placers is much more easily obtained, and a
greater number of people can be worked together upon it at once
than upon mines of silver, a vast supply of the more precious metal
soon made its way to Portugal. Flushed with this great and
sudden wealth, and confident that in a contest between rapidly pro-
ducing gold placers and and slowly producing silver mines the influ-
ence of the former would prevail, Portugal in 1688 determined upon
the bold stroke of coining its gold at 1 to 16 in silver, and thus com-
pelling those Spaniards who preferred the more precious metal to
pay nearly 15 per cent, more for it than the value they had fixed
upon it in their own coinages. Such was the force of this measure,
that two years later the Spaniards were fain to adopt the Portuguese
ratio, and thus relinquish one-seventh of the exchange value of the
metal which now formed the main portion of the American product.
This example is only one of many which history affords to prove
that the ratio between the metals is not all influenced by their
relative production, but altogether by law — not the law of weak
nations, but the law of strong ones. It will be found that whenever
the ratio has been changed by such nation, they enhanced the
value, not of the scarcer, but of the more plentiful metal; in other
words, of that metal over the production or coinage of which they
themselves possessed the control." (See also Encyclopaedia Brit-
tanica, vol. 22, p. 73, also Money and Civilization, pp. 217, 218.)

SEC. 31. It has been claimed, and even now is
asserted, by some of the advocates of the gold standard,
that the tendency has been ever since the Christian
Era for silver to depreciate in value as measured by gold.
This is not true; on the contrary sometimes one of the
metals has been raised In value, and sometimes the other,
but whenever changes have occurred, they have been
brought about by legal enactment.

22 BIMETALLISM

SEC. 32. Although I have already quoted extensively
from Del Mar, I cannot refrain from making one more
quotation from his " Money and Civilization," page 217,
in regard to these reckless, unwarranted, and untruthful
statements. He says:

" The men who make such reckless assertions are the men who
have caused all the present trouble about silver. They are CON-
CEITED PROFESSORS OF A PRETENDED POLITICAL ECONOMY,
CHARLATANS, WHO TEACH EVERYTHING AND LEARN NOTHING,
IMPOSTORS WHO THRIVE UPON THE CREDULITY AND INDIF-
FERENCE OF A WORLD TOO BUSY IN EARNING MONEY TO
STUDY THE SCIENCE OF ITS HISTORY. It was the poverty of
Spain in 1688 and the ignorance of Germany in 1870 that lowered
the value of silver upon the only two great occasions when it fell
at all."

He also says, in reply to the assertion that it will
require a concert of the great nations to restore silver
to its former position:

" It did not require a concert of the nations to break down the
ratio, and it needs no concert to restore it." " EITHER ONE OF THE
FOUR LEADING NATIONS CAN DO IT." (See also p. 219, " Money
and Civilization.")

SEC. 33. Such an opinion from Del Mar, the best
informed man that the world has ever produced on the
History of the Precious Metals and the Science of Money,
is worth more than the opinions of a thousand such men
as Wells, Atkinson, Laughlin, Giffen, and other
champions of the gold standard, who are so aptly described
in the quotation above given.

SEC. 34. If the law can make a dollar stamped upon
paper equal in value to a dollar stamped upon gold, with-
out any regard to the value of either the paper or the
gold upon which the stamp is placed and on which the
money function is conferred, does it not necessarily

RATIO BETWEEN THE METALS 23

follow that it can make a dollar stamped upon silver
equal in value to a dollar stamped upon gold, without any
regard to the value of the gold or silver bullion ?

SEC. 35. In proof of the fact that an inconvertible
paper money can be maintained at a parity with gold and
may be forced to a premium in gold, I quote McCulloch
Com. Die. pp. 68-69, the following:

"That inconvertible or irredeemable notes can be carried to a
premium in metal coins of the same denomination is proved by
numerous instances in the monetary history of countries where both
notes and coin were co-ordinate legal tenders. When the notes are
exclusive legal tenders, they may be carried by means of contraction
or limitation to any desired premium in coins." (See Sec. 179,
this volume).

There are numerous instances in which inconvertible
paper money has been carried to a premium in gold coins.
The same principle that will force gold to a premium in
paper money, will, if applied to paper money, force it to a
premium in gold. It will be found that whenever and
wherever gold has commanded a premium over inconver-
tible paper money issued by any responsible government,
that the paper money has been over-issued, or that it
was not fully invested with the money function, or that
the law permitted the people to discriminate against it by
making contracts payable specifically in gold or silver
coins. Reverse these laws, make paper money a full
legal tender for all purposes, limit the issue of paper
money to an amount not in excess of the distributive
share of the world's money that the issuing country, in
proportion to its population and business, could retain
within its borders, make the paper money a full tender
for all purposes, deprive metallic money of its legal tender
power, or make it a legal tender for certain specific
purposes only, or allow it to be discriminated against in

24 BIMETALLISM

private contracts and paper money will go to a premium

in gold or silver coins.

SEC. 35a. In commenting on the fact that in many
cases paper money had commanded a premium in gold,
the Indian Currency Commission in their report in 1893,
Sec. 92, page 34, says:

" The case of Brazil is perhaps the most remarkable of all, as
showing that a paper currency without a metallic basis, may if the
credit of the country is good, be maintained at a high and fairly
steady exchange, although it is absolutely inconvertible, and has
been increased by act of the government out of all proportion to the
growth of population and of its foreign trade.
The Brazilian standard coin is the milreis, the par gold value of
which is 27d. A certain number were coined, but have long since
left the country, and the currency is, and has since 1864 been,
inconvertible paper. The inconvertible paper was more than doubled
between 1865 and 1888, but the exchange was about the same at
the two periods, and very little below the par of 27d. It had gone
down to 14d. in 1868, the date of the war with Paraguay, but had
risen again, and was in 1875 as high as 28^d. (A premium of
l^d. on 27d. would be a trifle more than 5 per cent, premium in
gold that the inconvertible paper milreis commanded in 1875)."

For numerous instances in which an inconvertible paper
money has commanded a premium in gold coin the reader
is referred to Ricardo, John Stuart Mill, McCulloch, etc.

SEC. 35b. A bimetallic law does not assume to fix the
value of gold and silver bullion, or even to fix the
relative value between them. It fixes only the ratio at
which they may be coined into money and makes the
money, so coined, a full legal tender for all debts, public
and private, and gives the debtor the option to pay in
money coined from either of the metals at the ratio fixed,
and when this is done, the value will take care of itself.
With such a law admitting both metals to unlimited
coinage in force in any great commercial nation, and with

RATIO BETWEEN THE METALS 25

the option lodged with the debtor to use money coined
from either metal in the payment of debts, it would be
impossible for either of them to fall below the coinage
ratio, or to rise much above it, because if there were any
considerable rise created by demand for use in the arts
and manufactures, or for exportation, coin would be
melted for such uses.

SEC. 36. Mr. Groesbeck, one of the American dele-
gates to the International Monetary Conference of 1878,
in a speech delivered before the Conference (see page
109), said:

" If we can -keep an equilibrium of value between gold and silver,
all nations will be substantially upon both metals. Gold will be as
valuable as Silver everywhere, ajid Silver as valuable as Gold. It
is idle to theorize that this cannot be done. We know it has been
done. Throughout the entire past up to 1873, both metals were in
equal use as money, and kept together evenly enough. Now and
then, at long intervals, the relation between them was slightly
changed, but the change was easily made, and without noticeable
embarrassment. The change last made in Europe, fixing the
relation at 1 in weight of gold to 15^ in weight of silver, stood the
trial for more than three-quarters of a century. In all that time the
slight differences in the market value in the metals did not amount
to a serious disturbance. At one time one metal may have been at
a slight premium; at another time, the other, but their average
value was about the same. It is worthy of notice, that throughout
the past, and up to the middle of the present century, it was never
suggested by any writer or statesman that either of the metals
should be generally abandoned because of the difficulty of keeping
them sufficiently equalized. THIS IS THE LESSON OF MANY
CENTURIES, and, theorize as we may, what has been done in the
past can be done in the future; and instead of splitting hairs about
the Single or the Double Standard, let us rather walk in the light
of the experience of thousands of years."

SEC. 37. Del Mar, in his "Monetary Systems," page
63, calls attention to the fact that there are four distinct
periods in the history of this relation:

26 BIMETALLISM

" First— The period from the accession of Julius Cassar to the
fall of the Roman or Greek Empire in 1204, during which time the
Roman government by monopolizing the coinage of gold and fixing
the ratio between gold coins and silver, whether coined or otherwise,
at 12 for 1, kept it constant and unaltered at that figure. As during
the same interval the ratio in the Orient and the Arabian States
was about 6>£ for 1, and in the Gothic States, 8 for 1, some
variation from the Roman ratio is to be observed near the frontiers
of the Empire, but not elsewhere.

"Second— The period from the fall of Constantinople to the
enactment of Individual, Private, or Free Coinage in Holland,
England and other States in the sixteenth and seventeenth
centuries. During this interval the various princes of the Occident
began to coin gold, each for himself, and they fixed the ratio to suit
their own interest or necessities. This period is characterized by
the wildest dissonance of the ratio. It was a contest on the one
hand, between monarchs, who alternately raised the value of their
gold coins to the value of nearly twenty times their weight in silver
(as in France in 1313) and raised their silver coins to the value of
an equal weight in gold (as in France in 1359) ; and, on the other
hand, their subjects and foreigners, who, until they adopted
measures of avoidance or reprisal, were made the victims of these
frequent and ruinous changes of value.

" Third — The period from the adoption of individual or free
coinage to the years 1867-75. The principal States of the Occident
ceased to coin silver for individual account at the dates last
mentioned. During this interval the ratio of the value between
gold and silver was the mint price, or the result of a competition
between the mints of the principal States. For example, the value
of gold in silver during this interval, never rose above the highest
price paid for it at any important mint, and never fell below the
price paid for it at any other important mint. In other words,
nobody gave more nor less in one metal for the other than the
mints gave, and the mints gave whatever the law directed. The
so-called 'market value' of this period was simply what may be
termed the international mint ratio.

" Fourth— The period since 1867-75 when silver was being coined
by the principal States on their own account alone, there arose in
the West for the first time since the establishment of free coinage,
a general market value between gold and silver, entirely distinct
from, and having only a remote relation to their mint value."

RATIO BETWEEN THE METALS 27

SEC. 38. Julius Caesar established the Roman ratio of
12 to 1, and this ratio remained unchanged for thirteen
centuries. During all this time the gold coinage of the
Roman Empire was monopolized by the Basileus. The
various provinces under the dominion of Rome were per-
mitted to coin silver at the ratio of 12 to 1; and silver
either in coin or as bullion could be used only in the
payment of debts, of fines, taxes or revenue due the
Government at that ratio, but at that ratio it could be
used, whether coined or uncoined.

SEC. 39. Since the downfall of Constantinople in 1204,
there have been numerous changes in the ratio, and while
some of the changes unquestionably have been specu-
lative on the part of the King, most of them without
doubt were made for the purpose of attracting one or the
other of the metals, or to make the ratio more nearly
correspond with that of the surrounding nations.

SEC. 40. From 1493 to 1640, the amount of silver
produced from the mines of the world was 46,200 tons
and the amount of gold produced from the mines of the
world was about 1,125 tons, or about forty-one times as
much silver as gold. If the amount of production con-
trolled the relative value, the ratio during this period
would have been 41 to 1, while we know the ratio
during this period ranged from 13^-i to 1 to 16 to 1,
most of it coined at the former ratio.

SEC. 41. From 1620 to 1690, Spain obtained about 355
tons of gold and 24,720 tons of silver, or about seventy times
as much silver as gold. If the amount of the production con-
trolled the ratio, then the ratio during this period should
have been 70 to 1, yet the coinage ratio during all this
time in none of the European countries was below 16 to 1,
and in most of them it was 14 or 15 to 1. (See " Money
and Civilization " page 102).

28 BIMETALLISM

SEC. 42. Coming down to the present century, we
find that from the commencement of the present century
to 1848, the value of the silver produced, rated at its
coinage value, was about two and one-half times that of
the value of gold; so that, if the amount of production
controlled the value, the ratio should have been 39 to 1;
and that from 1848 to 1870 the value of the gold produced
was three times that of the value of the silver produced,
so that, if the amount produced controlled the ratio, the
ratio during this period should have been 5 to 1, and yet
we know, as a matter of fact, that during both of these
periods, that is from 1800 to 1870, the ratio between gold
and silver remained comparatively stable at \S% of silver
to one of gold. The divergence between the metals
during that time never exceeded 5 per cent, and seldom
exceeded 1 or 2 per cent, and such fluctuations in value,
when they did occur, were occasioned by extraordinary
demand arising from local causes, by mint charges, costs
of transportation, insurance, commissions, etc.

SEC. 43. From the foregoing historical facts is it not
conclusively established that the ratio between the metals
is not controlled — in fact, is not influenced at all by the
relative amounts of gold and silver produced? Since the
commencement of the present century it appears that
over a long series of years the value of the silver produced
was 2Yz times that of gold, and over another long series
of years the value of the gold produced was 3 times that
of the silver, and yet the coinage ratio remained
unaffected. In the discussion of the cost of the precious
metals, we have seen that the cost of the production of
either of the metals has no influence whatever on their
relative values. In the discussion of the influence of the
bimetallic law of France, we shall show that this law for
more than three-quarters of a century held the metals

RATIO BETWEEN THE METALS 29

together at a ratio of 15^ to 1, that in France there was
no fluctuation in the money power of gold and silver coins
coined under the bimetallic law in France, and that the
fluctuation in the value of gold and silver bullion in
France never exceeded that accounted for by the dif-
ference in the mint charges for fabricating gold and silver
coins; and that the fluctuations in silver bullion outside
of France never exceeded the cost of transportation to the
French mint, insurance, commissions, mint charges,
interest on money temporarily locked up, and other
incidental charges.

SEC. 44. I insist that the history of Bimetallism
clearly establishes the fact that neither of the metals can
fall in value below the coinage ratio in any country main-
taining free coinage of both' metals at a certain fixed ratio,
provided such country is able to consume, that is, to coin
and float as money, all of either metal that can by any
possibility be presented at its mints for coinage. There
may be slight fluctuations in the relative value of the
metals in other countries equal to the cost of transporta-
tion, insurance, commissions, loss of interest while in
transit, and other incidental expenses; but if the coinage
is gratuitous, or if there is an equal ad valorem charge for
the mintage of both metals, and the demand is unlimited
in the country thus coining, there can be no fluctua-
tion in any country in the relative values of the metals
greater than would be required to cover the above
mentioned items of cost and charges. It would not be
possible for the value of either metal to fall below the
mint price in the country so coining both metals; nor
could it rise very much above it, as any considerable rise
would cause the coins of the metals so rising to be melted.

And it is unquestionably true that, by an international
agreement, a ratio of 1 to 1 could be maintained without

30 BIMETALLISM

fluctuation in the relative values of the two metals equally
as well as one of 15^ to 1, or of 30 to 1; that it is not the
relative amount of production, nor the cost of production,
nor the amount of either of the metals in stock, nor of all
these combined, that fixes and maintains the relative
values of the metals, but the law and the law only;
and it does this by creating a demand for "the metals, by
setting an economic force in motion, by providing that the
metals shall be treated on terms of equality, that they
shall have equal access to the mint, and that when coined
into money the coins of each, at the ratio fixed, shall be
equally clothed with the money function for all purposes.
When this is done it would be as absolutely impossible for
them to fluctuate in value, as measured by each other, as
it would be for two gold coins of equal weight and fine-
ness to be unequal in value. Under a ratio of 1 to 1, it is
quite probable that but little gold would be coined into
money. The value of gold for other than monetary pur-
poses might and probably would exceed its value for
coinage purposes. If it did, its consumption in the arts
and for mechanical purposes would consume the entire or
nearly the entire output. But any gold that might be
coined into money under an international agreement of
1 to 1 would have no greater value, as money, than an
equal weight of silver so coined.

CHAPTER IV.

EXPORTATION OF THE PRECIOUS METALS.

SEC. 45. It is the balance of international trade that
causes one or the other of the metals to be exported from
one country to another, and it is the difference in the
ratio of coinage in the respective countries that determines
which of the metals shall be taken for export.

SEC. 46. Sir Isaac Newton in his report as Master of
the Mint to the Right Hon. the Lords' Commissioners of
his Majesty's Treasury, dated September 27, 1717 (I
quote from Appendix to "Colloquy on Currency," page
XIV) says:

" It appears by experience as well as by reason, that silver flows
from those places where its value is lowest in proportion to gold, as
from Spain to all Europe, and from all Europe to the East Indies,
China and Japan; and that gold is most plentiful in those places in
which its value is highest in proportion to silver, as in Spain and
England.

" It is the demand for exportation which hath raised the price of
exportable silver about 2d. or 3d. in the ounce above that of silver
in coin, and hath thereby created a temptation to export or melt
down the silver coin, rather than give 2d. or 3d. more for foreign
silver; and the demand for exportation arises from the higher price
of silver in other places than in England in proportion to gold; that
is, from the higher price of gold in England than in the other places
in proportion to silver; and therefore may be diminished by lowering
the value of gold in proportion to silver. If gold in England or
silver in East India could be brought down so low as to bear the
same proportion to one another in both places, there would be here

32 BIMETALLISM

no greater demand for silver than for gold to be exported to India;
if gold were lowered only so as to have the same proportion to the
silver money in England which it hath to silver in the rest of
Europe there would be no temptation to export silver rather than
gold to any other part of Europe. And to compass this last, there
seems nothing more requisite than to take off about lOd. or 12d.
from the guinea; so that gold may bear the same proportion to the
silver money in England, which it ought to do by the course of
trade and exchange in Europe; but if only 6d. were taken off at
present, it would diminish the temptation to export or melt down
the silver coin; and by the effects would shew hereafter better than
can appear at present, what further reduction would be most conve-
nient to the public.

" In the last year of King William, the dollars of Scotland, worth
about 4s. 6}4d., were put away in the north of England for 5s, and
at this price began to flow in upon us; I gave notice thereof to the
Lords Commissioners of the Treasury; and they ordered the collec-
tors of taxes to forbear taking them; and thereby put a stop to the
mischief.

"At the same time the louis d'ors of France, which are worth but
17s. and 3 farthings apiece, passed in England at 17s. 6d.; I gave
notice therefore to the Lords Commissioners of the Treasury; and
his late majesty put out a proclamation that they should go at but 17s;
and thereupon they came to the mint; and =£1,400,000 were coined
out of them; and if the advantage of 5^d. in a louis d'or sufficed at
that time to bring into England so great a quantity of French
money, and the advantage of 3 farthings in a louis d'or to bring it
to the mint, the advantage of 9}4d. in a guinea or above, may have
been sufficient to bring the great quantity of gold, which has been
coined in these last fifteen years, without any foreign silver.

" Some years ago, the Portugal moidores were received at the west
of England at 28s. apiece; upon notice from the mint that they were
worth only about 27s. 7d. the Lords Commissioners of the Treasury
ordered their receivers of taxes to take them at no more than 27s.
6d. Afterwards, many gentlemen in the west sent up to the
treasury a petition that the receivers might take them again at 28s.
and promised to get returns for this money at that rate; alleging
that when they went at 28s. their country was full of gold which
they wanted very much; but the commissioners of the treasury,
considering that at 28s. the nation would lose 5d. apiece, rejected
the petition; and if an advantage to the merchant of Sd. in 28s. did

EXPORTATION OF THE PRECIOUS METALS 33

pour that money upon us, much more hath an advantage to the
merchant of 9^d. in a guinea, « »b«r», bwu able to bring into the
mint great quantities of gold, wttfcaat any foreign silver; and may
be able to do it still, till the cause be removed."

SEC. 47. The coinage ratio in 1717 in England was
15.20 to 1; France was 15.04 to 1; Germany was 14.80
to 1; Netherlands, 14.45 to 1.

The difference between the English and French ratios
was but .16, which was an undervaluation of silver by
England as compared with the French ratio of 1}^ cents
on an ounce and yet so small an undervaluation was
sufficient to cause the exportation of English silver to
France and French gold to England as shown by Sir
Isaac Newton's Report.

SEC. 48. In examining the special instances cited by
Newton, we find a difference in the valuation of S%d. in
the French louis d'or, which was worth 17s., was suffi-
cient to bring into England a large amount of French gold,
and that a refusal to receive this French gold, except at a
discount of ^d., equal to an actual discount of about
three-tenths of one per cent, was sufficient to force it
into the English mint for recoinage. We also find that
the Portugese moidores, worth 27s. 7d. would not circulate
at a valuation of 27s. 6d. an undervaluation, of less than
three-tenths of one per cent.

SEC. 49. I have quoted quite liberally from Sir Isaac
Newton's Report; not only from his recommendation, but
also from the facts cited by him in support of them. I
am induced to do this not only on account of his eminent
ability as an economist and financier, but also for the
further reason that no one, I think, will question his facts.
This report, and the facts therein cited, conclusively
prove that a difference in the mint ratio in different
countries will cause the undervalued metal to be melted

34 BIMETALLISM

down, or exported to those countries giving it a higher
valuation, and that a slight undervaluation is sufficient to
produce this result. With a knowledge of these facts it
ought not to be difficult to understand why gold would
not circulate as money in the United States between 1792
and 1834, when it was undervalued in this country 3)4
per cent as compared with the European ratio; and why
silver coins were exported since 1834, they being under-
valued 3^ per cent, under the law of 1834 as compared
with the European valuation.

SEC. 50. The alternating demand for first one and
then the other of the metals has not been caused by any
general preference of the people for either of the metals,
nor by changes in the cost of production, nor by the
relative amounts produced but by the arbitrary decrees of
kings, princes and legislatures changing the ratios at
which they were permitted to be coined into money.
Changes in the ratio have sometimes been made for
speculative purposes, but generally for the purpose of
attracting one or the other of the metals into the nation
making the change, but never for the purpose of making
the ratio coincide more nearly with the relative production
of the two metals. On the contrary, all important and
radical changes in the ratio have been made in favor of
the more abundant metal, that is, in increasing the rela-
tive value of the metal of which there was, at the time,
the greatest production.

CHAPTER V.

FIRST SILVER AND THEN GOLD OVERVALUED IN THE
UNITED STATES.

SEC. 51. It is claimed by the gold standard advocates
that it is impossible to hold the metals together by virtue
of a legal ratio; that the laws of commerce are superior to
any legal enactment; that repeated attempts have been
made to fix a legal ratio so as to coincide with the market
value of the metals, and that all such attempts have
utterly failed. The adoption of the French ratio of 15^
to 1 in 1803, and that of 15 to 1 in the United States in
1792, and of 16 to 1 in 1834, they claim were such
attempts.

SEC. 52. In the chapter on "Bimetallism in France"
(see Chapter XII), it will be seen that the facts do not
warrant the assertion as to France, and I now propose to
show that it is notrtrue as to the United States.

SEC. 53. In 1785 a Committee on Coinage and Finance,
previously appointed, reported to Congress recommehding
the adoption of a ratio of 15 to 1. (See report of Com-
mittee on Finance of Continental Congress, vol. 26, pp.
537-560.) Among other things the committee says:

" In France one grain of pure gold is counted worth fifteen grains
of silver. In Spain sixteen grains of silver are exchanged for one
of gold and in England 15}4. In both of the kingdoms last
mentioned, gold is the prevailing money, because silver is under-
valued. In France silver prevails. SUNDRY ADVANTAGES

36 BIMETALLISM

WOULD ARISE TO US FROM A SYSTEM BY WHICH SILVER
MIGHT BECOME THE PREVAILING MONEY. THIS WOULD
OPERATE AS A BOUNTY TO DRAW IT FROM OUR NEIGHBORS
BY WHOM IT IS NOT SUFFICIENTLY ESTEEMED."

SEC. 54. This committee showed that the ratio of 15
to 1 overvalued silver, but it recommends that ratio,
because in the opinion of the committee, " sundry advan-
tages would arise to us from a system by which silver
would become the prevailing money." The United States
did not at that time adopt any ratio, but in 1792 it did
adopt the ratio of 15 to 1, and France in 1792 was coining
at the ratio of 15^£ to 1. On the adoption of the ratio of
15 to 1, in the United States in 1792, it was well known
that silver was overvalued, and this ratio was adopted for
the express purpose of attracting silver, it being believed
that silver was better adapted to the wants and demands
of the people, at that time, than gold.

SEC. 55. By the Coinage Act of 1834, gold was over-
valued. There was no attempt in 1834 to make the
coinage ratio agree with the "market" values of the
bullion, but gold was purposely overvalued because gold
had been discovered in the mountains of Georgia and the
Carolinas, and extravagant hopes were entertained that
immense deposits of gold would be found, and that over-
valuing gold three or four per cent, would stimulate its
production. The propriety of raising the value of gold
had been discussed for several years. In 1831 Albert
Gallatin, who had been Secretary of the Treasury for
eight years under Thomas Jefferson, in a work entitled
" Considerations of the Currency," said:

" Another consideration in favor of the proposed reform of our
gold coins. It seems to be well ascertained that the United States
contains some of the most extensive deposits of gold that have yet
been discovered. * It appears

but just to afford to those employed in collecting the natural
product, a certain, and the highest, home market of which it is
susceptible."

OVERVALUATION 37

SEC. 57. In the early days of the Republic, before
wealth dominated every department of the Government,
it was regarded as a very proper thing to legislate in
favor of the wealth producer and secure for him the best
market possible, but in 1873, when a large amount of
silver was being produced, instead of legislating to
increase or even sustain its value, the Act of February
12 was of such a character as to take away from it a
part of its value and degrade it as a money metal, by
denying it access to the mint.

CHAPTER VI.

CONSUMPTION IN THE ARTS.

SEC. 58. Of course no one knows with certainty how
much gold is annually consumed in the arts and manufac-
tures. Estimates, however, have been made by trustworthy
statisticians that the consumption for other than monetary
purposes amounts to from two-thirds of the annual pro-
duction to the total output. Mr. Soetbeer, the foremost
statistician of the age, says (p. 53):

" The assumption that in the years recently passed, together with
the outflow to the East, and the still prevalent practice of hoarding,
industrial employment has materially checked the increase of the
monetary gold stock, and may, presumably, have nearly absorbed
the yearly new production of gold, cannot, it is true, be numerically
demonstrated, but, on the other hand, just as little will it be possible
to demonstrate its incorrectness."

SEC. 59. Professor Suess, of the University of Vienna,
in his work on " The Future of Silver," quotes the above
paragraph from Dr. Soetbeer, and then says:

" This view I share entirely, and it corresponds to the present
condition of affairs. But the industrial demand increases from year
to year with increase of wellbeing. We have either already
reached the day, or approached very close to it, when mining will
yield less than industry consumes. From that day forward the
whole new production no longer counts for monetary needs, and
from that day forward industry will withdraw from the stock of
money an amount of gold increasing annually with the increase of
wellbeing."

CONSUMPTION IN THE ARTS 39

SEC. 60. Mr. Giffen, statistician for the London Board
of Trade, in his book entitled, " The Case Against Bimet-
allism " (p. 85), says:

" About two-thirds of the gold annually produced is taken for the
arts; and if the consumption of India is included * then

the demand for gold for non-monetary purposes appears almost
equal to the entire annual production."

SEC. 61. President Andrews, in his article on " Falling
Prices " printed as a preface to his " Honest Dollar,"
estimates that the consumption for other than monetary
purposes in the year 1893 was $108,565,000 out of a total
production of $155,522,000, which leaves $46,956,000 for
coinage purposes, which is less than one-third of the
year's production, and which would not much, if any
more than keep the old stock good from loss by accident,
abrasion, etc.

SEC. 62. Sir Guilford Molesworth, delegate from
British India to the International Monetary Conference of
1892 in a speech delivered before the Conference Dec.
6th, 1892, said: "The annual supply of gold scarcely
exceeds the amount required for industrial purposes."

SEC. 63. In Appendix B, of the third report of the
Royal Commission on Trade, Mr. Palgrave furnishes
some statistics relative to the amount of gold and silver
money in the world and the amount of gold and silver
annually consumed in the arts and manufactures. His
figures are based mainly on the estimates of Soetbeer,
and are as follows:

Stock of gold and silver money, including hoards, in the civilized
nations of the world in 1884—

Gold £654,000,000— (equals $3,270,000,000)

Silver 437,000,000— (equals $2,185,000,000)

Production in 1884—

Gold £19,500,000— (equals $ 97,500,000)

Silver 26,000,000— (equals $130,000,000)

40 BIMETALLISM

The average annual consumption of gold in the arts and manu-
factures and exports to the East (deducting imports therefrom) for
the four years 1881 to 1884 was ,£16,500,000, which leaves but
.£3,000,000 ($15,000,000) of new gold available for maintaining or
increasing the coinage, and for hoarding.

The annual consumption of silver during the same time, in the
arts and manufactures was about ,£"4,500,000 ($22,500,000), whilst
the net annual flow of silver to the East was ,£14,500,000 ($72,000,-
000). Thus we have a total consumption of silver for non-monetary
purposes of about ^"19,000,000 ($95,000,000), leaving a balance for
coinage purposes, and for hoarding, of about .£7,000,000 ($35.000,-
000). (See Monetary Problems 304).

SEC. 64. By the phrase "Civilized Nations of the
World," I understand Mr. Palgrave includes Europe,
America, and Australia, and excludes Asia.

SEC. 65. Jacob's estimate of production of gold and
silver from 1493 to 1809, and the manner of its consump-
tion, is given in Chapter I, Sec. 9 of this Volume. Out
of a total production of ,£1,360,600,000 he estimates that
.£346,000,000 only was added to the volume of money,
and that the remaining ^1,014,000,000 was lost by
abrasion and casualty, exported to the Orient or con-
sumed in the arts and manufactures. See Chapter I,
Sec. 9, for particulars as to the manner of consumption.

SEC. 66. Alex. Del Mar, without doubt the best in-
formed man living, on the history and movement of the
precious metals, in his work entitled " A History of the
Precious Metals " (pp. 184 and 185) makes the following
estimate; he says:

"The total sum of the supplies to Europe up to 1878 inclusive
were about .£2,627,800,000. To this must be added ,£33,400,000,
for the amount of specie estimated to have been in use as coin in
Europe at the period of the discovery of America. The total of
these two sums is .£2,661,200,000. The amount of coin estimated
to have been in the Western World in 1876 was .£700,000,000. And

CONSUMPTION IN THE ARTS

41

at the present time [1880] it is from ^600,000,000 to ^700,000,000.
It follows that of the total supplies nearly ^"2,000,000,000 or over
70 per cent, has been lost, consumed in the arts or exported to Asia.
" Similar calculations made up to previous dates determines the
proportion of consumption to production to have been as shown in
the following table:

SUMS IN MILLIONS OF POUNDS STERLING

Date

Cumulative Supplies
to date

Stock
at date

Cumulative Con-
sumption to date

Per cent of Con-
sumption to Supplies
since last date

1675

509

250

259

50

1700

592

297

295

50

1776

1,054

275

797

74

1808

1,314

380

935

71

1828

1,441 313

1,128

78

1838

1,510 270 I 1,240

82

1850

1,675 400

1,275

76

1860

2,040 560

1,480

72

1870

2,365 720

1,645

70

1876

2,564 740

1,824

71

" From this calculation it appears that, within the past century the
consumption in the arts, etc., and for exportation to Asia has never
fallen below 70 nor risen above 82 per cent, of the total supplies and
this only at one period of unusual metallic dearth. These results
appear to afford ground for the opinion that, hereafter, as hereto-
fore, this consumption will amount to about three-fourths of the
supplies; but such an opinion, though possibly correct, should not
be adopted without further examination."

SEC. 67. Del Mar's estimate includes both of the
precious metals, and it is a well known fact, conceded by
all statisticians, that the annual consumption of gold for
other than monetary purposes is much greater, in propor-
tion to its production, than is that of silver. The proba-
bilities are that the estimates of Soetbeer, Suess, Giffen,
Palgrave, Del Mar, and others, that the total annual
product of gold was being consumed for other than mone-
tary purposes was true in 1894 and 1895, when made, and
that the new gold then being coined was no more than
sufficient to make good the loss by abrasion, casualty and

42 BIMETALLISM

to supply the demands of the Orient and for hoarding,
and that the world's supply of gold money, available for
use, was not being increased. Since 1894-5, however,
there has been an abnormal increase in the world's pro-
duction of gold. The annual output has nearly doubled
since 1893, and unquestionably new gold has been coined
into money, possibly twenty-five or thirty per cent, of the
total output, which is a much larger per cent, than was
formerly used for monetary purposes.

SEC. 68. The fact that during the past 400 years 25
per cent, only, or even less than 25 per cent, of the gold
and silver produced has been coined into money, and that
75 per cent, has been consumed in the arts and manu-
factures or exported to the Orient is a startling fact to
men who have given no special attention to the money
question. They naturally conclude that if $400,000,000
worth of gold and silver bullion is being annually taken
from the mines and placers of the world, then $400,000,-
000, or nearly that amount, is being added to the world's
volume of money, and that such an increase is sufficient
to keep pace with the increasing population, increasing
development and extension of business and the neces-
sarily increasing demand for money.

SEC. 69. They lose sight of the fact that Asia now is,
and for many centuries has been, a sink for the precious
metals; that when once exported to Asia they are forever
lost to the Western World, and that more than one-half
of the gold and silver produced from the mines and placers
of the world since 1493 has been so consumed. The gold
imported into India in excess of that exported therefrom,
as shown by the official reports, (see Laughlin's History
of Bimetallism in the United States, pp. 346, 347), from
1855 to 1893, a period of thirty-eight years, amounted to
$711,523,000, and yet the financial reports during all

CONSUMPTION IN THE ARTS 43

that time do not show that there was during that time
a dollar of gold money in India. This $711,000,000
worth of gold in the short space of thirty-eight years was
absorbed by the people of India for jewelry, for trinkets
of various kinds, for hoarding and for sacerdotal purposes,
and during the same time a large amount of silver was
consumed in the same manner. What is true of India is
also true of all other countries in Asia.

SEC. 70. The gold and silver imported into India,
from 1855 to 1893, in excess of exports therefrom,
amounts to $2,274,088,000. (See Laughlin's History of
Bimetallism in the United States, pp. 346-347). The
World's production of the precious metals during the
same time as shown on pages 194-195 of the 1897 report
of the Director of the Mint was, gold $3,502,003,000, and
silver $4,589,096,000 the total production for the 38 years
being $8,091,099,000, from which it appears that 28 per
cent, of the total production was exported to India alone.
The imports into other Asiatic countries, to-wit: China,
Japan, the Straits Settlement, Siam, etc., countries
which, taken together, have more than $400,000,000
more money than India has, unquestionably equals, if it
does not exceed, the imports into India. Supposing,
however, that the net imports of the precious metals into
all of these countries is no more than the Indian import;
even then, we have for consumption of the precious
metals in Asia, 56 per cent, of the total output. Of the
remaining 44 per cent, one-half is consumed in the arts
and manufactures, leaving less than 25 per cent, for
monetary purposes in the Western World.

SEC. 71. The finance reports of the United States
contain no special estimate of the amount of the precious
metals consumed for other than monetary purposes, but
facts are given from which approximate estimates can

44 BIMETALLISM

be made. The annual report of the Director of the Mint
for 1897, pages 194-195, gives a tabulated statement of
the world's production of gold and silver from 1493 up to
and including the year 1896, from which it appears that
$8,983,320,600 of gold and $10,556,700,800 of silver has
been produced, which makes a total production of $19,-
540,021,400. On pages 40-41, of the same report, the
Director of the Mint estimates the stock of metallic
money in the world on January 1, 1897, at $4,359,600,000
in gold coin and $4,268,300,000 in silver coin, which
would give us a total of $8,627,900,000 of metallic money,
of which he locates $2,329,500,000 in Asia. Deducting
from the total stock of metallic money, the money in
Asia, we have $6,308,400,000 as the total volume of
metallic money in the world exclusive of that held in Asia.

In order to determine how much of the gold and silver
produced since 1493 has been added to the world's
volume of money, we must deduct from the present
stock, the metallic money in existence in 1493, which is
estimated by Jacob, whose estimate is generally accepted
as approximately correct, at ^33, 400, 000, or $167,000,000,

If we deduct $167,000,000 for the total metallic money
in the Western World in 1493, we have $6,141,400,000,
as the sum added to the world's volume of metallic
money since 1493 exclusive of that exported to Asia. It
thus appears, assuming the estimate of the Director of
the Mint to be correct as to the amount of metallic money
now in existence, that of the $19,540,021,400 worth of
gold and silver bullion produced since 1493, $13,398,-
621,400 has been used for non-monetary purposes or
exported to the Orient, and but $6,141,400,000 has been
coined into money; in other words 69 per cent, has been
consumed in the arts and manufactures or exported to
Asia, and 31 per cent, added to the volume of money.

CONSUMPTION IN THE ARTS 45

SEC. 72. It is well known, however, that the Director
of the Mint grossly overestimates the metallic money of
the Western World. For instance, he estimates the
silver money in the United States at $634,500,000, (see
report 1897, p. 41), and he shows on page 37 of same
report that this estimate includes $106,697,670 worth of
silver bullion which is not money at all, and may never
become money. It is also well known that he over-
estimates by more than $200,000,000 the gold coin in the
United States. There is no doubt that the Director of
the Mint overestimates the metallic money of the West-
ern World more than $1,000,000,000, but even assuming
his estimate to be correct, it appears that 69 per cent,
of the precious metals produced since 1493 has been
used for non-monetary purposes, lost by casualty and
abrasion, or exported to the Orient, and only 31 per
cent, added to the money of civilization; and if a proper
allowance is made for his overestimate of the amount of
metallic money in existence, it will be seen that the
estimates of Soetbeer, Jacob, Del Mar, Giffen, Jones,
Palgrave, Suess, and other statisticians are within the
limit, and that fully 75 per cent, of the precious metals
are so consumed, and that not more than 25 per cent, is
added to the volume of money, and that the relative
proportion, so consumed, of gold, is greater than that of
the silver, and also that the proportion consumed for
other than monetary purposes is increasing with the
increase of wellbeing.

SEC. 73. Notwithstanding the fact that it is well
known by all economists that but a small per cent, of the
world's production of gold is added to the world's volume
of money, Professor Laughlin, (who signs himself " Head
Professor of Political Economy in the University of
Chicago"), in his book entitled "The History of
Bimetallism in the United States," page 205, says:

46 BIMETALLISM

" Inasmuch as trustworthy authorities say the gold product will
continue on the present great scale for at least fifteen years (at an
annual output of at least $220,000,000), we may reasonably look
forward to an addition of $3,000,000,000 in our stock of gold during
these years, or an amount as large, if not much larger than, the
whole gold circulation of the world in 1850. The imagination is
challenged to picture the result of this abundance, and it is not too
much to say that it takes away whatever force may have been left
in the argument of the bimetallists that gold is scarce and insufficient
for the needs of trade."

SEC. 74. Can it be possible that the "Head Professor "
of Political Economy in the University of Chicago does
not know that a small per cent, only of the gold now
being produced, or hereafter likely to be produced, is
being coined into money? Can it be possible that the
" Head Professor " never read the statistics published to
the world by Humboldt, Soetbeer, Del Mar, Giffen,
Palgrave, Suess, and others, and reproduced in the
Appendix in his own book on Bimetallism? Can it be
possible that the Appendix was prepared by some one
other than the "Head Professor," and that the "Head
Professor " never read it? He must be ignorant of the
fact stated by Suess that " we have either already reached
the day or approached very close to it when mining will
yield less than industry consumes, that from that day for-
ward the whole new production no longer counts for mone-
tary needs, and from that day forward industry will with-
draw from the stock of money an amount of gold increas-
ing annually with the increase of wellbeing." The " Head
Professor " of the University of Chicago is either
ignorant of these facts, or he is dishonest, and is
attempting to deceive the people.

CHAPTER VII.

VALUE.

SEC. 75. In my article on Bimetallism published in
the Arena for June, 1896, and reproduced in the Appen-
dix to this volume, I discussed the question of value and
endeavored to prove, and I think I succeeded in so doing,
that there was no such thing as "intrinsic value." I
shall not, in this chapter enter upon a discussion of this
question, but shall content myself with citing a few addi-
tional authorities in support of the principle there enunci-
ated, and refer the reader to the arguments there adduced
in support of them.

SEC. 76. Walker on Money, Trade and Industry,
page 32:

" Value is not a property of anything. It arises wholly out of
relations which exist between things."

SEC. 77. Senator Jones, October, 1893, speech, p. 10:

" Value is subjective,not objective; and not being objective it
cannot be intrinsic."

SEC. 78. Senator Jones in the International Monetary
Conference of 1892, p. 255:

"The much vaunted 'intrinsic' value of gold does not exist.
The idea that it does exist is founded upon a misconception
altogether too long tolerated regarding the meaning of the term
value. Value I define to be: HUMAN ESTIMATION PLACED UPON
DESIRABLE OBJECTS WHOSE QUANTITY IS LIMITED AND WHOSE
ACQUISITION INVOLVES SACRIFICE.

48 BIMETALLISM

SEC. 79. Senator Jones in International Monetary
Conference, p. 255:

" Value is subjective, not objective. It resides not in the article,
but in the mind. It is the degree of mental estimation in which the
possessor of an article holds the qualities possessed by the article,
as modified by the limitation of the quantity of such articles and the
average amount of sacrifice necessary to obtain them. An article
may, therefore, have estimable qualities that are intrinsic, and
for which the possessor may value or esteem it, but no article what-
ever can have intrinsic value."

SEC. 80. Jevons' Political Economy, p. 159. Mill's
Principles of Political Economy, Book 3, chap. 9, sec. 3:

" Alterations in the cost of production of the precious metals do
not act upon the value of money, except jnst in proportion as they
increase or diminish its quantity; which cannot be said of any other
commodity. It would, therefore, I conceive, be an error, both
scietifically and practically, to discard the proposition which asserts
a connection between the value of money and its quantity."

SEC. 81. Rogers' Industrial and Commercial History
of England, p. 324:

" The fundamental cause of value in the precious metals is their
use as money."

SEC. 82. Gide's Political Economy, p. 216:

" Gold and silver owe almost the whole of their value to the fact
that they can be converted into and used as money. If gold and
silver were absolutely excluded from the currency of the world, their
value would be greatly reduced, if it did not almost entirely cease
to exist. And if either gold or silver were largely excluded from
the currency of the world, the value of the metal so excluded would
experience a very great fall."

SEC. 83. Gide's Political Economy, p. 216:

" No doubt if gold and silver were demonetized in every country,
metallic money would lose the greatest part of its value. We must
not deceive ourselves as to this matter; and the present fall in silver
caused by its demonetization in some countries, only too fully proves

VALUE 49

this fact. Yet many authors do harbor this illusion, or at any rate
do not put their readers on their guard against it. Most of them
seem to say that the Government seal stamped on gold or silver
coin merely state their actual value, just as the tickets tradesmen
put on their goods. But the declaration that the six-gram piece is
worth twenty francs is not only DECLARATORY, but it is also
DETERMINATIVE of value. It is because the will of the legislator,
or, if it is preferred, the agreement of men has chosen gold and
silver as money, that these metals have acquired the larger part of
their value; and they would lose it as soon as this agreement or this
law happens to cease to exist."

SEC. 84. Del Mar's Science of Money, p. 67:

" If it be asked, what is the precise character of this numerical
relation called value? the reply must be that although it depends
upon many uncertain and incalculable elements, as human necessity,
desire, passion, speculation, and caprice, yet, as shown in another
part of this work, it is essentially an equitable relation, or one that
between equal parties has a tendency to become equitable; that it is
extremely variable; that it is extrinsic to and not connected with
the physical properties of, nor difficulty in producing, commodities;
and that it is susceptible of precise expression in numbers and in
numbers only."

SEC. 85. Graham's Synonyms:

" Value being a definite relation, dannot with propriety be coupled
with an indefinite article. ' A value,' for example, is erroneous.
Value has an active, worth a passive meaning. The quality
' worth ' is what a thing is in itself; its value is determined by
what it does for you. Worth is 'intrinsic,' value depends upon
circumstances."

SEC. 86. Walker's Money, Trade and Industry, p. 60:

" Value is a relation, and, therefore, cannot be measured, but
only expressed or stated. Value is, in the very nature of things,
a phenomenon which is subject to incessant change; therefore there
can be no standard for it. So palpable is this objection that some
writers who still cling to the term Measure of Value have
abandoned that of Standard of Value. * * But, in fact, neither
term is correct."

CHAPTER VIII.

VALUE OF THE PRECIOUS METALS.
SEC. 87. Del Mar, in the closing paragraph of his
"History of the Precious Metals" (page 359) deduces
the following economic principles:

First— "That owing to the great influence of the accumulated
stock on hand of the precious metals, and the fact that a large
portion of this was obtained by conquest or slavery, and therefore,
at the time it entered into the exchanges it cost little or nothing,
free mining has always been and for a long time yet will remain on
the average an unprofitable industry, and that gold and silver cost
more than they are worth.

Second — " That the supply of gold and silver is not like that of
other, and particularly, manufactured commodities, subject to the
control of man, but is dependent on the vast stock on hand of these
metals, and on the unforeseeable issue of mining discoveries and
explorations from time to time; and that therefore, gold and silver
are not subject in the same unconditioned manner as are other
commodities, to the general law of supply and demand.

Third — " That the value of gold and silver is not determined by
the cost of their production, but by the quantity in existence, or
rather by the total quantity of these metals and their substitutes,
(paper promises, and symbols, and paper and metallic numeraries)
employed as money."

SEC. 88. F. W. Bain of Oxford, England, says:

" Cost of production so important and decisive as to the value of
commodities bought with money, is, in the case of money itself,
of no account whatever. For, any particular commodity we
can do without; and so if it costs too much to produce no one will
buy it, but money must be had at all costs, for without it, no

VALUE OF THE PRECIOUS METALS 51

commodities can be procured at all. And, be it observed, money is
comparatively permanent. It is not, like commodities in general,
consumed in the use. Consequently there is a great and even
enormous difference between it and things produced to be consumed.
It is, as a rule, the rapidly perishing commodity whose value
depends mainly on its cost of production. Each time it is wanted it
must be made again. But money, once made, is there for almost
any length of time, for though it wastes a little, yet not much, its
value therefore can be hardly, if at all, appreciably dependent on its
cost of production." (See Principle of Wealth Creation, p. 101.)

SEC. 89. John Stuart Mill says:

" Alterations in the cost of production of the precious metals do
not act upon the value of money, except just in proportion as they
increase or diminish its quantity, which cannot be said of any other
commodity." (Principles of Political Economy, Book 3, Chapter
9, Sec. 3.)

SEC. 90. Professor Walker, in his " Money, Trade
and Industry," (page 55), quotes approvingly the above
paragraph from Mill, and then says:

" How will the action of money, the Value Denominator, or
Common Denominator, in exchange be affected by the use of gold
otherwise than as money? Not at all. * * The use of
gold in the arts, decorative and industrial, has nothing to do with
the purchase power of the gold, as money. On the contrary, it is
the purchase power of gold as money, which primarily determines
how much gold shall be consumed in the arts."

SEC. 91. Mr. Gibbs, in his " Colloquy on Currency "
says:

" The value of bullion is not regulated by the cost of production.
In this it differs from other commodities."

SEC. 92. Del Mar, in his " History of the Precious

Metals " (page 16) says:

" Rising from the obscure details of the early history of the
precious metals, it may not be amiss before opening its more modern
and authentic chapters to briefly characterize its general features.
These are slavery and conquest; slavery being the means by which

52 BIMETALLISM

the precious metals were chiefly first acquired, and conquest those
by which their possession was transferred from one nation to another.
Their price to their original producers, even were it calculable,
can be of no possible interest to the modern world. The blood and
sweat which they originally cost were not sacrificed by the races who
now possess them; but by others long since extinct and forgotten.
We of later times have come into their possession by violence.
They are a deeply ensanguined inheritance, and it is not until the
millions of lives which this violence has involved can be reduced to
a pecuniary equivalent, that the value of what portion of the
precious metals has come to us from the ancient times can be
reduced to a basis of cost."

SEC. 93. He also says:

" The relative quantities of the precious metals does not fix the
relative value of the metals, nor does the relative cost of production
fix it. What does fix it? Simply the law of the nation or nations
that coin the greatest quantity of them. In short, the conditions
under which the precious metals are produced have nothing what-
ever to do with their relative values in the market. This results
entirely from the legal ratio at which they are being coined, and
the quantity coined under the legal ratio." (See "Money and
Civilization," page 104.)

SEC. 94. The idea that the value of the precious
metals, or that their relative value is controlled, or even
influenced at all, when coined into money, by the cost of
production is fallacious. Quantity is the essential ele-
ment in the value of money, without any regard to the
fact as to whether the material out of which it is made
cost much or little. The value of money whether
stamped on gold, silver, or paper, or any other substance,
depends upon its quantity as compared with the quantity
of commodities to be exchanged for money; and the
relative value of gold and silver bullion depends upon the
mint price paid for it by important nations, and the mint
price is fixed and regulated exclusively by law.

CHAPTER IX.

INFLUENCE OF LAW ON VALUE.
SEC. 95. One of the objections urged by gold mono-
metallists against the restoration of silver to free coinage
at the ratio existing prior to 1873 is that silver is now
worth only about half as much as it was in 1873, and that
to coin money at the old ratio would be a great injustice
to creditors, would, in fact, amount to a virtual confisca-
tion of one-half of all obligations payable in money. They
also insist that the present price of silver is its normal
price, fixed by the law of supply and demand, and that
the Government should not, if it could, and could not if it
would, double the value of silver by legislation; that law
can exert no influence upon value; that supply and
demand must, of necessity, regulate and control value.
They object to the restoration of silver to the right of
coinage, under any circumstances, on terms of equality
with gold and they strenuously insist in the name of
"honest money " and the " inviolability of contracts,"
that if silver is restored it should only be done at the present
commercial value of silver bullion, that is to say, at about
the ratio of 32 to 1. They say that to pay a debt of $130
at the present time it would require 200 ounces of silver
bullion, and that if silver were restored to free and unlimited
coinage at the ratio of 16 to 1 and invested with the full
legal tender money function, this obligation could be paid
with the money coined from 100 ounces of silver bullion;

64 BIMETALLISM

this, they insist, is a positive injustice to the creditor, as
he would be compelled, under such a law, to receive one-
half the amount he had a right to expect at the time of
the execution of the contract. That these objections are
fallacious can very easily be shown.

SEC. 96. The objections to a ratio of 32 to 1 are:

First — That the silver dollar is now large enough for all
practical purposes. To double its size would be to encum-
ber uselessly the pockets of those who would have to
handle and use this money, and a silver dollar double the
size of that now in circulation would be of no greater
money value than the present dollar, and

Second — Recoinage at the ratio of 32 to 1 would entail
a positive loss to the nations, or to the people of the
nations recoining, of one-half of the silver money they
now have. There is in the world about $4,000,000,000
in silver money. To recoin this money at a ratio of 32 to
1 would reduce the volume of silver money one-half; this
would amount to a positive and sudden contraction of
$2,000,000,000 in the world's volume of money, and
would produce a financial crisis such as the world has
never experienced and which it is to be hoped it may
never be afflicted with.

SEC. 97. Would the creditor be injured by the free
coinage of silver? Suppose the Government should
restore to silver to its ancient right of unlimited legal tender
and of free and unlimited coinage at the ratio of 16 to 1,
and that, on account of such unlimited coinage and legal
tender power, the price of silver bullion should advance
from 65 cents per ounce to $1.29 per ounce. Would the
creditor be injured? I fail to see how he would be injured
in the least. While it is true that at present it would
take 200 ounces of silver bullion to pay a debt of $130,
and that under free coinage the muney coined from 100

INFLUENCE OF LAW ON VALUE 55

ounces would pay it, yet the creditor would not be injured
because the 100 ounces received under free coinage would
have precisely the same value that the 200 ounces of
silver bullion have today. It is true that if paid in silver
bullion at the present price of silver bullion, and that if on
the adoption of a free coinage law at the old ratio silver
should double in value, one-half the amount of silver
bullion would then satisfy the debt but the value received
in both cases would be the same, and it is in value that
the creditor is to be paid in and not in silver bullion.
Even at the present time, unless the contract is payable
specifically in gold coin, a debt of $130 can be paid in
silver money coined from 100 ounces of the silver bullion
precisely as it might be under a free coinage law. The
only difference is that, under a free coinage law, the
debtor owning bullion would have access to the mint
for coinage purposes, while at present he has no power to
convert his bullion into money. Is it not perfectly appar-
ent that there is no force in this objection?

SEC. 98. These gentlemen forget, also, or ignore the
fact, that the reason why silver has fallen in value as
measured by gold is because, and only because, it has
been, by law, deprived of its chief use, of its money power,
and of free access to the mint, and that upon its restora-
tion to its former position as a money metal at the old
ratio its old value will reassert itself. Mr. Gibbs, in his
" Colloquy on Currency," page 32, gives a very happy
and forcible illustration of this fact. He says:

" Supposing a decree that no man should wear a hat; people
might make hats, buy and sell hats, carry them in their hands, sit
on them, play football with them, hang them up anywhere; but on
no accouut, wear them on their heads. Is it not probable that the
price of hats would fall? The Government of the day would no
doubt, say with you, Harrop, that— 'The then existing price indi-

56 BIMETALLISM

cated the natural value of a hat; that they had not interfered with
the price, that they had left that to the natural laws of supply and
demand.' That is just what they have done with silver. They
have cut off half the demand; and then they say the resulting price
is a true indication of the value of tlie commodity. Repeal the
' Hat Edict,' and you would find that the neglected stock of hats
would again be in use on the heads of the lieges, who would very
cheerfully pay the accustomed price for them. So would it be also
with silver — restore its use as full money and you would see that
its price would respond."

SEC. 99. The advocates of a gold standard, or at least
that portion of them who are ready to deny or ignore
well established monetary principles and contradict all
the historical facts relating to money insist that law can-
not influence value and that the coining of gold and silver
bullion into money, and conferring upon such coin the
legal tender money function, adds nothing to its value;
that the stamp of the government is merely a certificate
of the weight and fineness of the metal, and that bullion
in bars has, and must necessarily have, the same value as
the same amount of bullion in coined money; and these
" gentlemen " apply to anyone who differs with them on
this proposition such pet names as " lunatic," "faddist,"
etc., etc. (See writings of Wells, Giffen, Atkinson,
Laughlin, and other pseudo economists of this school.

SEC. 100. Let us examine this question. Professor
Walker, in his work on "International Bimetallism"
(page 94) says:

" There is not a civilized country in the world at present where
the law is not profoundly affecting, if not controlling, the value of
some commodity. Laws often affect values when they were not
intended to do so. Indeed, it is often difficult to prevent laws from
affecting values when they are passed for a very different purpose,
even when the result of affecting values has been carefully sought
to be avoided. Whenever the law sets an economic force in motion
it can and will and must affect value. The degree in which value

INFLUENCE OF LAW ON VALUE 57

shall be affected will depend upon the extent of the economic force
thus put into operation. Law cannot create value, that is, add to
the sum of wealth, but to say it cannot affect value, that is, change
the relative value of things, is preposterous.

"As regards Bimetallism, then, the question simply is, can
government set in motion any economic force which will affect the
relative value of gold and silver? I answer, yes, incontestably;
and that force is one of enormous scope and reach. By declaring
the two metals indifferently legal tender in the payment of debts, at
a certain ratio, it at once and powerfully influences the demand for
one and the other of the two metals. This was what France did by
the law of 1803. That law gave an ounce of gold, in coined money,
precisely the same power to pay debts as that possessed by 15^
ounces of silver, in coined money. The operation of this principle
was simple, instantaneous, automatic. If, at any time, either of the
two metals became less valuable than by the legal ratio, every
debtor instanctively sought coin of that metal, with which to meet
his obligations in preference to coin of the other metal. This
increased the demad for the cheaper metal; and, by that very act,
decreased the demand for the metal which was becoming dearer in
the market. Now, to increase demand is, other things equal, to
raise price; while to decrease demand is, other things equal, to lower
price. Thus, through its power to regulate the payment of indebted-
ness, the government practically threw its weight upon that one of
the two metals which tended to rise and keep it down. No one
wanted the dearer metal to pay debts with; everyone wanted the
cheaper metal for that purpose; and since the volume of indebted-
ness coming due every day in any commercial country is very large,
the force thus invoked was sufficient to produce an enormous
economic effect. It was not at all because the French Government
declared that one part of gold should be worth 15J4 parts of silver
that this result took place; but because the French Government set
in motion competent economic forces to that end.

" Chevalier, in his day the leading monometallist of France; the
monometallist Lexis, the first economic statistician of Germany, if
not of the world; the monometallists Cairnes, Jevons, Bagehot,
the three greatest economists of England who survived John Stuart
Mill; and Sir Robert Giffen and Lord Farrer, today the chief
champions of monometallism; every one of the men quoted, and I
might add a score of eminent names, has fully and ungrudgingly

58 BIMETALLISM

conceded the principles stated. The concurrence of general opinion
on this subject is overwhelming. Not a person worth quoting can
be cited to the contrary effect." (See Walker's " International
Bimetallism," page 96.)

SEC. 101. A bimetallic law does not attempt to fix the
price or relative value of the two metals; it only fixes a
ratio at which they will be coined into money, and invest
the money coined from either of the metals with the legal
tender function, and when the ratio is thus fixed, the law
of demand will fix the price. The debtor, having the
option to discharge his obligations in money coined from
either, will as a matter of self-interest select the metal
which can be obtained the cheapest and the extra demand
thus created will soon counteract any decline in relative
value, and it would be impossible for any great divergence
between them. Chevalier, writing in 1860 on the French
ratio of 15^ to 1 said: " While this state of things lasts,
(that is unlimited coinage, at the ratio of 15^ to 1) it
will be impossible at London, Brussels, or Hamburg, or
even at New York, or at any other great center of com-
merce, for the value of gold to fall much below 15}^ times
its weight in silver."

SEC. 102. Count Rusconi, delegate from Italy to the
International Monetary Conference held in Paris in 1878,
in a speech delivered before the conference, and reported
in the proceedings of the conference, pages 61-62, said
that he did not believe, for his part, that the establish-
ment of a ratio between gold and silver was like squaring
the circle.

" A metal is one thing," said he, " but Money is another. Nature
makes the metal. Law alone makes the Money. If the uncoined
metal is subjected, as merchandise, to all the accidents of supply
and demand, all the variations of the market, the coined metal being
no longer a merchandise, but having legal tender power, has a
price which does not vary. In a peice of metal, coined according to

INFLUENCE OF LAW ON VALUE 59

certain rules as to alloy, impression, size, shape, weight, the law
becomes in a manner INCARNATE. It gives it the power of paying
obligations, a virtue, a price, which the metal-merchandise could
not obtain. It is not wrong to say that silver rises and falls in the
market. In the territory of the States, however, where the law
reigns and governs, the value of the Coin does not change. Our
countrymen would be greatly astonished if they were to be told that
the S-franc piece which they laid by in 1873, which they put into a
savings bank, or kept in their chests, has in the last five years
performed all the somersaults outlined in the very instructive table
which the Director of the Administration of Coins and Medals of
Paris has kindly communicated to the Conference. The metal
changes in value it is true; but as long as the State maintains itself
the Coin does not change; it has actually and effectively the value
which is indicated by its imprint."

SEC. 103. That legislation can and does influence
value by increasing or diminishing the demand for a
thing is an economic principle so well established that no
well-informed man who has any regard for truth or con-
sistency, will question it. The history of the silver
legislation in this country fully attests this fact. When
the Bland-Allison Act was passed in 1878, it created a
demand for silver which did not exist prior to its passage;
and by reason of this increased demand, caused solely by
legislation, the price of silver rapidly advanced in all the
markets of the world. Again in 1890, when the Sherman
Act was adopted which increased the demand for silver
from $2,000,000 worth of bullion per month to 4,500,000
ounces per month, silver bullion rose in value in a few
days from 94 cents per ounce to $1.20 per ounce, not only
in the United States but also in Europe. When the India
mint, in 1893, was closed to the free coinage of silver,
silver fell almost as much in value in five days. In view
of all these facts, can there be any doubt that legislation
did, in the instances named, affect the value of silver
bullion?

CHAPTER X.

BIMETALLISM

SEC. 104. Bimetallism is defined by Webster to be
" The legalized use of two metals (as gold and silver) in
the currency of a country at a fixed relative value."

SEC. 105. The difficulty with many of the advocates
of the gold standard is that they do not know what
bimetallism is. They do not distinguish between money
and a piece of metal; they think that gold is money and
that the stamp of the Government upon a gold or silver
coin is simply a certificate of the weight and fineness of
the metal, and that neither the stamp nor the law author-
izing its use and conferring upon the coin the money
function adds anything to the value of the coin, and that
its value depends exclusively on the value of the metal
contained in the coin.

SEC. 106. This is the position taken by the gold
standard advocates. From such premises is devolved the
rrielting-pot fallacy which was so persistently urged
during the campaign of 1896. The gold standard advo-
cates insisted that the test of "good money," "sound
money," " honest money," is the melting-pot. They
said: " Put $100 in gold coin in the melting-pot and when
melted the gold is still worth $100; but put $100 of silver
coin into the melting-pot and when melted it is worth but
$50. Hence gold is the only good money."

BIMETALLISM 61

SEC. 107. Mr. Boissevafn, a member of the Statistical
Institute of the Netherlands, published a pamphlet of
about 100 pages entitled " The Monetary Situation,"
which has been translated into the English language and
extensively circulated in the United States by the gold
standard advocates as an able exposition of the Science of
Money. In this pamphlet Mr. Boissevain says:

" The right to coin money belongs to the government; but its
object is no other than to insure the uniformity in the coins and
their equal weight of fine metal. It is with the legislature whose
object is to prevent uncertainty in the interpretation ot contracts
—that rests the power to decide what metal shall be used for
the coinage, what money shall be legal tender. It is, however,
not the fact of HAVING BEEN COINED THAT GIVES ITS VALUE
TO THE METAL USED AS LEGAL TENDER, BUT THE COINS OWE
THEIR VALUE ONLY TO THAT OF THE METAL ITSELF."

SEC. 108. It is difficult to understand how any man of
ordinary intelligence — much less a man who professes to
know something about the Science of Money — can say
" coins owe their value only to that of the metal itself."
There is not a banker or business man in the United
States who does not know that the silver dollar in circu-
lation in this country gets its value, as money, from the
law and the impression it has received at the mint, and
not from the metal it contains; and that would not refuse
to receive it if the stamp was defaced or the law confer-
ring on it the money function should be repealed; who
does not know that the value of the metal contained in
the coin is less than one-half of the value of the coin, and
yet the gold standard advocates do not hesitate, at least
many of them do not hesitate, to give publicity to such
misleading and unwarranted statements as those promul-
gated by Mr. Boissevain.

SEC. 109. Mr. Boissevain lives in the Netherlands.
The last official report shows that the coin money in use

62 BIMETALLISM

at that time in the Netherlands consisted of $21,900,000
in gold (florins) and $52,700,000 in full legal tender
silver (florins) coined at the ratio of 15^ to 1, and
$3,400,000 in limited tender silver money coined at the
ratio of 15 to 1. The full tender silver florins were at
the date of that report and are today discharging the
money function in the Netherlands at their face value, to
all intents and purposes, as fully and completely as the gold
florins, although the value of the metal they contain is less
than one-half as much, florin for florin, as the value of the
metal contained in the gold coin. If coin money "owes
its value only to that of the metal itself," will Mr.
Boissevain explain why it is that the silver florin readily
passes as money for twice the value of the metal con-
tained in the coin?

SEC. 110. Mr. Boissevain lives almost within stone's
throw of France, and must know that in France there is
in actual use as full legal tender money abeut $400,000,-
000 in silver francs, every franc of which is discharging
the money function at its nominal or face value at par
with gold, although the metal value of the silver franc is
less than one-half as much as the metal value of the gold
franc.

SEC. 111. Mr. Boissevain must know that in Europe
there is at the present time nearly $700,000,000 in full
legal tender silver money in circulation amongst the
people, coined at the rate of about 15^ to 1, and more
than $500,000,000 subsidiary silver money coined at a
ratio of about 14 or 14^ to 1, and that this silver money
is discharging the money function at its nominal value,
equally as well as the gold money circulating side by
side with it, while its commodity or metallic value is less
than one-half that of the gold; and yet he says, " The
coins owe their value only to that of the metal itself. ' '

BIMETALLISM 63

SEC. 112. Mr. Boissevain, being a member of the
Statistical Institute of the Netherlands, may be a very
good statistician; but from a perusal of his pamphlet it
becomes evident that he is profoundly ignorant of the
most elementary principles of monetary science; that he
does not even know what money is; that he is not able
to distinguish between money and a piece of metal; that
his knowledge of political economy has been acquired,
not by studying the masters, but by inspiration, and
that he has been imposed upon by false prophets. He
is, however, entitled to a seat on the same shelf with
Wells, Atkinson, Laughlin and Giffen.

SEC. 113. Suppose I have a silver disc weighing 412)4
grains, nine-tenths fine, precisely such silver as the
Government uses in coining silver dollars. I go out on
the streets of a large city and try to sell it. How many
men can I find that will buy it? Probably there are not
ten men in the city that want it. As a commodity it has
but one use, it will answer but one purpose. If I find a
man that wants it, then there is a haggling as to the
price. I want fifty cents for it, and he offers forty cents
only; we finally compromise, and I sell it for forty-five
cents. Now I have another silver disc of precisely the
same size, weight and quality of silver, but this one has
passed through the mint, it has the stamp of the Govern-
ment impressed upon it; it has been invested with the
money function. Who wants this silver disc? Every
man, woman and child in the city wants it. Is there any
haggling about the price? Not at all. It is worth 100
cents. And every man, woman and child in the city
will gladly take it at that price and pay for it with com-
modities or services. Is it not perfectly apparent that
this silver disc does not get its value from the value of
the metal it contains, but from the fact that it has been

64 BIMETALLISM

invested with the money function? As a commodity it
would answer but one purpose; as money it commands
all things.

SEC. 114. The melting-pot theory as a test for money
is what Terrence O'Brian, in the play of Peter Simple,
calls "flapdoodle," "the stuff they feed fools on."

SEC. 115. The theory of the ordinary gold standard
advocate is that in order to maintain bimetallism, both
metals must be in circulation in equal volume at the same
time, and at all times, and that the Government must at
all times be prepared, able and willing to exchange gold
for silver, or silver for gold, upon the request or demand
of any citizen, or upon the request or demand of any Gov-
enment, and that whenever the money coined from one of
the metals is largely in excess of that coined from the other,
or whenever one of the metals commands a premium over
the other, or whenever the Government refuses to redeem
the coins of one of the metals in the coins of the other,
then bimetallism is overthrown. Entertaining these views,
they insist that bimetallism did not, in fact, exist in the
United States between 1792 and 1834, but silver mono-
metallism, because most of the metal money in use in
this country during that time was silver; and that since
1834 the United States has been upon a gold basis
because since 1834 our metallic money has been mostly
gold. They also claim that since 1803, France has been
for a part of the time on a silver basis and for a part of
the time on a gold basis, because at some times there was
more silver, and sometimes more gold in circulation in
France. Men entertaining such views ought to consult a
dictionary for a definition of bimetallism.

SEC. 116. Bimetallism does not consist in the actual
use of two metals conjointly, but in the right, under the
law, so to use either of them at the option of the debtor

BIMETALLISM 65

at a certain fixed ratio in the payment of debt. If one of
the metals happens to be scarce and hard to obtain, and
the other is abundant, or if one of the metals commands a
premium in the other, the debtor would not be likely to
spend much time in looking for the scarcer and dearer
metal with which to liquidate his obligations, but would
make use of that which was more abundant and cheaper;
and so long as the bimetallic law remained in force it
would make no difference to him whether gold or silver
was most abundant, or whether none of one of the metals
was in circulation. Even though one of the metals should
entirely disappear from the country, bimetallism would
remain a fixed fact as long as both metals had access to
the mint on equal terms, at a fixed ratio, and the coins
fabricated from each of the metals were equally invested
with the money function, and the option was with the
debtor to use either of them in payment of debt.
Neither is it necessary in order to maintain bimetallism
in any country that the government, at the demand of any
person or of any government, should exchange one of the
metals for the other. If both metals when coined into
money at a certain ratio have equal debt-paying power,
if both are equally invested with the money function for
all purposes, they will be equally valuable as money in
such country when so coined; if either should depreciate
in monometallic countries, and such countries desire to
obtain the dearer metal, the metal of their choice, the
burden rests on such countries, and not on the bimetallic
country, to pay the premium created by their short-
sighted policy.

SEC. 117. It is not contended that, under a bimetallic
law, gold and silver bullion will always remain at exactly
the same relative value all over the world. Sometimes
the bullion of one of the metals might command a slight

66 BIMETALLISM

premium in the other, even in bimetallic countries.
In bimetallic countries a slight premium might result
from scarcity of either of the metals, from sudden and
extraordinary demand for one or the other of the metals
for use in the arts or manufactures, or from demand for
export, but the premium in bimetallic countries would
necessarily be slight, as any considerable premium would
cause the coin of the metal for which a premium was
offered to be melted. The premium could scarcely exceed
the mint charge for fabrication and the cost of collecting
the coins. In monometallic countries the premium might
become considerably greater, because in addition to mint
charges, cost of transportation from such countries to
bimetallic countries, insurance, commissions, interest on
money invested, etc., would have to be added. There
might and probably would be fluctuations in the \ialue of
gold and silver bullion as above indicated.

SEC. 118. When we consider the effect of the French
law of 1803 on the relative value of gold and silver bullion,
and see that the fluctuation in their relative value in France
from the legal ratio of 15^ to 1 never exceeded but very
slightly in amount the discrepancy in mint charges, and
that even in other countries the fluctuation in their value
never exceeded the mint charges, plus cost of transporta-
tion, insurance, commission, interest and other incidental
charges, and that the relative value of the coined money
never fluctuated at all for three-quarters of a century, or
so long as the mint was kept open, it amounts to a
demonstration that any first-class nation can, with a
bimetallic law faithfully executed, hold even the relative
value of gold and silver" bullion comparatively steady.

SEC. 119. While it is admitted by bimetallists that
there may be a slight fluctuation from the legal ratio in
the value of gold and silver bullion, arising from local

BIMETALLISM 67

influences, they contend that there will not and cannot be
any fluctuation in the value of the money, as money, coined
from such bullion, or at least the value of the money
coined from either of the metals, cannot fall below the
mint ratio. They contend that it stands to reason that
when a dollar coined from one metal is invested with all
the functions possessed by a dollar coined from the other
metal, when it will pay as much debt or buy as much
commodity as the other, it will be just as valuable as
money as the other, and that no man will pay more for
one than for the other. If a person desires the gold or
the silver in the coin for other than monetary purposes,
he may pay a slight premium to obtain it, but no man
will dispose of either for less than its money value, for he
can always obtain that at the mint. So, while it might
be possible that either of the metals, or coins of either of
the metals, might command a slight premium, it would be
impossible for coins of either to fall below their money, or
face value. If a person desired to withdraw money from
circulation for the purpose of hoarding and he believed
there was more probability of silver depreciating in value
than there was of gold, he would hoard gold. If he
believed there was a greater probability of gold depreciat-
ing, he would hoard silver. If, however, he desired to
use it as money, and the coins of both metals had equal
monetary power, it would make no difference to him
whether he received gold or silver. All this talk about
there being a general preference among the people for
gold money is the veriest nonsense. In ninety-nine cases
out of one hundred when a man receives money he
receives it because it is money and not because it is gold
or because it is silver. Not once in one hundred does he
think of it as gold or silver; all he cares to know is that
when he desires to part with it others will receive it from

68 BIMETALLISM

him at the same valuation that he received it. If he
wanted money for small transactions he would probably
prefer silver, and subsidiary silver at that, which usually
has less commodity value than full tender silver coins. If
he wanted to carry with him a somewhat larger sum he
would probably prefer gold. If he desired to carry on his
person a still larger sum he would in all probability prefer
paper money, but in none of these cases would any
thought of the commodity value of the money enter his
head, he would be consulting only his own convenience.

SEC. 120. During the time the bimetallic law of France
held the metals comparatively steady at the legal ratio of
15^ to 1, the production of the precious metals was as
follows:

From 1803 to 1820, value of silver four times that of
gold; from 1821 to 1840, value of silver two times that of
gold; from 1841 to 1860, value of gold two and a half
times that of silver; and yet the metals held together
with but slight fluctuation from the French ratio of 15j£
to 1, notwithstanding the enormous fluctuation in the
quantity of the metals produced.

SEC. 121. Free coinage means that any person may
present bullion at the mint and have it coined into money.
Gratuitous coinage means that the bullion so presented at
the mint will be coined into money and the same weight
of fine metal in coined money will be returned to the
person so presenting the bullion without any charge for
fabricating the coin. Where bullion is received without
limit from any person who may present it, and coined
into money and returned to him in coin, the coinage is
said to be free and unlimited although -a seigniorage may
be exacted for fabricating the coin. The word free as
applied to coinage has reference to the right of access to
the mint for coinage purposes, and no reference whatever

BIMETALLISM 69

to seigniorage or mint charges. In order to place both
metals upon an exact equality, the seigniorage or mint
charge, if any is made, should be an ad valorem charge,
the same charge being made for the same value of each
metal.

SEC. 122. M. Rowland, Governor of the Bank of
France, in discussing bimetallism, said :

" We have not to do with idle theories. The two moneys have
actually co-existed since the origin of human society. They co-
exist because the two together are necessary, by their quantity to
meet the needs of circulation. This necessity of the two metals,
has it ceased to exist? Is it established that the quantity of actual
and prospective gold is such that we can now renounce the use of
silver without disaster? "

SEC. 123. At a session (October 30th, 1873), of the
Belgian Monetary Commission, Professor M. de Laveleye
said :

" Debtors, and among them the States, have the right to pay in
gold or silver, and this right cannot be taken away without disturb-
ing the relation of debtors and creditors, to the prejudice of debtors
to the extent of perhaps one-half, certainly of one-third. To increase
all debts by a blow, is a measure so violent, so revolutionary, that
I cannot believe that the government will propose it, or that the
Chamber will vote it."

SEC. 124. The U. S. Monetary Commission of 1876
in their report, page 10, says:

"The philosophy of the double standard is that a rise in the
value of money and a fall in general prices are the greatest evils
which can befall the world, and its object is to prevent, as far as
possible, the occurrence of these evils. It takes no precaution
against a fall in the value of money, because in the whole history
of the human race not a single instance can be pointed out of a fall
in the value of either or of both of the metals which has not proved
a benefaction to mankind; while on the other hand, during every
period, and whenever a rise in the value of metallic money has
occurred, it has been attended by financial, industrial, political, and

70 BIMETALLISM

social disaster. An increasing value of money and falling prices
have been and are more fruitful of human misery than war,
pestilence, or famine. They have wrought more injustice than all
the bad laws which were ever enacted. Under the double standard
these evils could never occur, except by a rise in the value of both
metals, while under the single standard they might be caused by a
rise in the value of one of them."

SEC. 125. The phrase "Double Standard" does not
mean two standards but one standard based upon two
metals. Under a proper bimetallic law, where both
metals have the same mint privileges, value for value,
and coins from both of them are equally invested with
the money function for all purposes when coined at the
established ratio, they would be of equal value, and a
dollar coined from silver and one coined from gold would
no more constitute a double standard than two gold
dollars or two silver dollars would constitute a double
standard. Mr. Helm is unquestionably right in rejecting
the phrase " Double Standard " as unmeaning and mis-
leading and using the phrase "Joint Standard" in lieu
thereof.

SEC. 126. Bimetallism does not necessarily mean an
expansion of the volume of money. It is not at all
probable that the total annual production of the precious
metals, if not an ounce of either was consumed for other than
monetary purposes, (and the amount being consumed in
the arts, manufactures and for export to the Orient,
equals three-fourths of the annual output), would more
than keep pace with the increasing demand for money.
The most that can reasonably be expected from it would
be that it might check a further fall of prices. But if it
should increase prices, if it should even, eventually,
restore the prices prevailing in 1873, who would be
injured ? M. Chevalier, in his book written in 1857 on

BIMETALLISM 71

the "Probable Fall in the Value of Gold," pp. 125-126,
says:

" It follows, therefore, that if we would particularize the persons
who will be more or less deeply affected by a fall in gold, we have
only to select those whose income, expressed in monetary units,
(the pound sterling in England, and the franc in France) will not
find itself augmented, naturally and by self-adjusting process, in
exact proportion to the fall in gold.

" All those persons whose income expressed in monetary units
remains the same, would be injured by a change to the extent of a
half of their income, (assuming that money should fall in value 50 per
cent) all other things being equal. The national creditor is the
characteristic type of this class of sufferers.

" All commodities, excepting gold, and every kind of property
excepting that of which the income is from the present fixed, as is
the case with government funds, ought, from the moment that the
monetary crisis is terminated to have attained in the gold currency
double the price which they are at present worth, upon the supposi-
tion quite arbitrary, I admit, of the depreciation reaching fifty per
cent. Thus a house or a landed estate now worth ^"4,000 or 100,-
000 francs, would then sell for ^"8,000 or 200,000 francs. The
HECTOLITRE of corn or of wine, the quintal of iron, or the METRE
of calico will undergo the same rise, or at least if no change con-
ducive to cheapness be introduced into the conditions of their
production, or into the relations between the supply and the
demand. It will be the same eventually with the wages of labor,
and with all personal services, whether rendered in the factory or
the farm, or from the liberal professions; we are warranted in
believing that their value will have doubled.

" Thus, as a definitive analysis, the proprietors of land, houses,
and other real estate, manufactures, merchants and their auxiliaries
of every kind; public functionaries of all ranks; and also those who
follow the different learned professions, will all find themselves in
the end compensated in the new state of things with advantages
equal to those which they now enjoy, all other things being equal.
It is another class of persons, whom we have previously defined, in
a general way, who would have to submit to a sacrifice in propor-
tion to the fall in the precious metals."

SEC. 127. M. Chevalier concedes that manufactures

72 BIMETALLISM

and their auxiliaries of every kind, public functionaries
of all ranks, in fact all persons except the creditor classes
will not be injured by a fall in the value of money. In
speaking of rewards for services, and the value of
property, he says: "We are warranted in believing
that their value will have doubled." It is another class
of persons, not the wealth producers, not the business
men, not the workers in society, but the idle, non-
producing, wealth-consuming class that will be injured.
In re-reading the quotation from M. Chevalier it will be
seen that the class for whom M. Chevalier is particularly
solicitous is composed of those persons, "Whose incomes
in monetary units remain the same," of which he says,
"The national creditor is the characteristic type of this
class of sufferers."

SEC. 128. If a fall in the value of money would injure
the class of persons over whom M. Chevalier is shedding
tears of sympathy, does it not necessarily follow that an
appreciation in the value of money would benefit them ?
And have they not been reaping the benefits of an appre-
ciating money continually since 1873 ? Notwithstanding
the fact that they have been reaping a rich harvest from
falling prices caused by a constantly appreciating money,
bimetallists deny that these men have acquired a vested
right to do so perpetually; and they insist, that
prices should not be forced to a lower level, and they
also insist that if by means of bimetallism, or by some
other means, the general level of prices prevailing in
1873 should be restored, the creditor classes would have
no just cause of complaint. If the price prevailing in
1873 could be restored, the prosperity and general
business activity that would result therefrom would
enable the wage-earning, wealth-producing classes to
recuperate their waning fortunes.

BIMETALLISM 73

SEC. 129. In the consideration of the question whether

the adoption of international bimetallism would cause an

inflation of prices, Professor Nicholson in his "Money and

Monetary Problems," pp. 156-157, says:

" Assuming for the present that under any circumstances likely to
occur the ratio, if fixed by international agreement, within any
reasonable limits could be maintained— which was the unanimous
finding of the Gold and Silver Commission — let us consider what
would be the effect of a large increase in one or both of the two
metals. The first thing to notice is that even if the annual supplies
are largely increased within limits of all probable — if for example,
they are doubled, or even quadrupled in twenty years— still the
effect, having regard to the total mass, will be comparatively small.
The quality which pre-eminently adapts the precious metals for a
standard of value is their durability, with the result that their total
mass is always great compared with the annual supply. Secondly,
we must observe, that all of the increase in production does not go
to coinage, but some part, and probably a large part, will be used in
the arts. Thirdly, as already explained, under the quantity theory
of money, the rise in prices will not be exactly proportioned to the
increase in the quantity of metallic money. Fourthly, we must
remember that under present conditions, at any rate the civilized
world is growing in wealth, and population, and that in consequence
there are greater demands on the precious metals. Thus, on
balance, the conclusion appears to be that any increase in the annual
production that is at all likely to take place would not so much tend
to bring about an inflation of prices as to keep them from falling."

' SEC. 130. There has never been a time in the history
of the world when the total supplies of the precious
metals have been sufficient to furnish the world with an
adequate supply of money. Even when both of them
had free access to the mint we have been obliged to
supplement them with fiduciary money, and there is no
probability that they will ever be sufficient to satisfy the
ever-increasing demand for money. This being true,
the act demonetizing silver may properly be designated,
" An Act of Treason against the Human Race."

74 BIMETALLISM

SEC. 131. The Royal Gold and Silver Commission of
which Lord Herschell was chairman, composed of six
monometallists and six bimetallists, probably the ablest
Commission ever convened, unanimously adopted the
following statement :

"When we examine the marked contrast which the period prior
to 1873, presents to later periods, and the extensive changes in the
relative production of the two metals which took place during the
earlier period, it seems impossible to conclude that the circumstances
connected with the supply sufficiently account for the altered con-
ditions in the relative value of silver and gold since that date. In
the forty years between 1833 and 1873, which include the period of
the great gold discoveries, and the consequent increase in the
available supply of that metal, but little change in the gold price of
silver can be observed. In the ten years from 1831 to 1840, the
proportion which the value of silver produced bore to that of the
gold was as 1.86 to 1 in the five years from 1851 to 1855, the pro-
portion had fallen to .288 to 1. Yet the market value of silver only
varied between 15.75 to 1 in the former period, and 15.41 to 1 in the
latter. On the other hand, if we compare the five years 1871 to
1875 with the five years 1876 to 1880, we find that the proportions
borne by the production of silver to that of gold was .710 to 1 in the
first period, and .794 to 1 in the latter. But this change, almost
insignificant when compared with those to which we have called
attention above, coincided with a fall in the market value from
15.97 to 1 to 17.81 to 1.

" Looking, then, to the vast changes which occurred prior to
1873 in the relative production of the two metals, without any
corresponding disturbance in their market value, it appears difficult
to us to resist the conclusion that some influence was then at work
tending to steady the price of silver, and to keep the ratio which it
bore to gold approximately stable. * * Undoubtedly, the
date which forms the dividing line between an epoch of approximate
fixity in the relative value of gold and silver and one of marked
instability is the year when the bimetallic system, which had
previously been in force in the Latin Union, ceased to be in full
operation; and we are Irresistibly led to the conclusion that the
operation of that system, established as it was in countries, the

BIMETALLISM 75

population and commerce of which were considerable, exerted a
material influence upon the relative value of the two metals.

" So long as that system was in force we think that, notwith-
standing the changes in the production and use of the precious
metals, it kept the market price of silver approximately steady at
the ratio fixed by law between them, namely 15^ to 1. * *
* Nor does it appear to us A PRIORI unreasonable to suppose
that the existence, in the Latin Union, of a bimetallic system, with
a ratio of 15>^ to 1 fixed between the two metals, should have been
capable of keeping the market price of silver steady at approximately
that ratio." (See "International Bimetallism," page 135.)

SEC. 132. The Commission also report that :

"We think that in any conditions fairly to be contemplated in the
future, so far as we can forecast them from the experience of the
past, a stable ratio might be maintained if the nations we have
alluded to [The United Kingdom, Germany, United States, and the
Latin Union] were to accept and strictly adhere to bimetallism at the
suggested ratio. We think that if in all these countries gold and
silver could be freely coined, and thus become exchangeable against
commodities at the fixed ratio, the market value of silver as
measured by gold would conform to that ratio, and not vary to any
material extent.

" We do not deny that it is conceivable that these anticipations
might be falsified by some altogether unprecedented discovery of one
or other of the precious metals, and that the maintenance of a stable
ratio might then become difficult. But for practical purposes, we
think we may put this aside and reasonably act on the assumption
that no such grave dislocating cause is likely to arise. We have
already drawn attention to the fact that, during the time covered by
the great gold discoveries, the production of silver continued undi-
minished, and that of late years, when gold is said to have been
appreciating, the production of silver has increased.

" Apprehensions have been expressed that, if a bimetallic system
were adopted, gold would gradually disappear from circulation. If
however, the arrangement included all the principal commercial
nations we do not think there would be any serious danger of such
a result. Such a danger, if it existed at all, must be remote. It is
said, indeed, by some, that if it were to happen, and all nations
were to be driven to a system of silver monometallism, the result
might be regarded without dissatisfaction. We are not prepared to

76 BIMETALLISM

go this length; but, at the same time, we are fully sensible of the
benefits that would accrue from the adoption of a common monetary
standard by all the commercial nations of the world, and we are quite
alive to the advantages of an adoption by these nations of a uniform
bimetallic standard, as a step in that direction." (See International
Bimetallism, p. 204.)

SEC. 133. The monometallic members of the Royal
Gold and Silver Commission were Lord Herschell, Sir
C. W. Fremantle, Sir John Lubbock, Lord Farrer, J. W.
Birch, and Leonard H. Courtney. The bimetallic
members were Sir Louis Mallet, Henry Chaplin, A. J.
Balfour, Sir. M. H. Houldsworth, Sir David Barbour and
Sir Samuel Montague, all able men. While the first
named members of the Commission conceded all the facts
in the above quotations from their report they declined to
recommend the adoption of bimetallism by Great Britain.
The six bimetallists made a separate report, in which
they refer to the above and other concessions in favor of
bimetallism, in which report, they declare themselves in
favor of:

" 1st. The Free coinage of both metals into legal tender money.

" 2nd. The fixing of a ratio at which the coins of either metal
shall be available for the payment of all debts at the option of the
debtor."

SEC. 134. Since making this report, (1887), Mr
Courtney, one of the ablest financiers on the Commission
has become a bimetallist and is now one of the most
pronounced champions of bimetallism in England.

SEC. 135. Professor Nicholson, (see Monetary Prob-
lems, page 116), says:

" Opinions differ not on the desirability, but on the possibility of
a remedy. 1 do not suppose there is any banker, or financier, or
trader with a practical knowledge of the question, apart from a few
who make a profit from speculative exchanges, who would not admit
that if the old ratio between gold and silver, or the old narrow limits

BIMETALLISM 77

of fluctuations could be re-established without disturbance, it
would be on excellent thing for the industrial and financial world.
The whole difficulty lies, in this, as in so many other cases, in this
little word 'if'."

SEC. 136. No doubt Professor Nicholson is correct
in saying that no banker or financier, or trader with a
practical knowledge of the question, except a few who
make a speculative profit from exchanges, denies the
advantages that would accrue from a restoration of silver
to its ancient position as a money metal. It is not the
men, as a general rule, who have a practical knowledge
of economic questions who oppose bimetallism in the
United States. The question in this country is no longer
an economic question, but a political one.

SEC. 137. Only a short time ago the great mass of the
people in this country were practically a unit in favor of
the restoration of silver to the position it occupied prior to
1873.

SEC. 138. Senator Allison, one of the delegates from
the United States to the International Monetary Confer-
ence held in Brussels in 1892, in stating the wishes of the
people of this country (see report, page 46), said:

" The people of the United States believe it to be practicable to
freely use both metals for monetary purposes, and thus to establish
a parity of value between them. The two principal parties of the
United States are not divided upon this question, and the delegates
to this Conference represent not only the party which is now in
power, but also that which has been restored to power by the recent
election of Mr. Cleveland to the Presidency. Our view as respects
this question is held with singular unanimity by all the people of
the United States as one for the promoting of the common interest
of all nations. We desire to confer with you cordially and frankly
upon measures adapted to promote the Interest of all without seek-
ing any special advantage for the United States. Our recent census
shows the total value of all the products of our agriculture, of our
forests, of our mines and of our industries to have been in 1890,

78 BIMETALLISM

$13,000,000,000. The external commerce of the United States is
increasing year by year and was in the last fiscal year larger than
ever before. It is our interest to extend this production and to
enlarge this commerce. Compared with these large values, the
product of silver mining in the United States, which amounts in
round numbers annually to $50,000,000, is, as you will see, not a
large factor; but its monetary use affects, we believe, all these
products, all values, and all exchanges of them. I should be glad
to emphasize the fact that our interest in this matter grows out of
our production and the commerce that follows it. Even if our
mines should cease to produce silver our interest in this question,
which we share in common with the commercial world, would be no
less urgent."

SEC. 139. James G. Elaine, in a speech delivered in
the United States Senate in 1880, said:

" I believe the struggle now going on in this country, and in other
countries for a single gold standard, would if successful, produce
wide-spread disaster in and throughout the commercial world. The
destruction of silver as money and establishing gold as the sole unit
of value must have a ruinous effect upon all forms of property
except those investments which yield a fixed return in money.
Those would be enormously enhanced in value and would gain a
disproportionate and unfair advantage over other species of property.
If, as most reliable statistics affirm, there are nearly $7,000,000,000
of coin or bullion In the world, very equally divided between gold
and silver, it is impossible to strike silver out of existence as money
without results that will prove distressing to millions, and utterly
disastrous to tens of thousands. I believe gold and silver coin to
be the money of the constitution, indeed, the money of the American
people, anterior to the constitution, which the great organic law
recognized as quite independent of its own existence. No power
was conferred on Congress to declare either metal should not be
money. Congress, has therefore, in my judgment, no power to
demonetize either. If therefore, silver has been demonetized, I am
in favor of remonetizing it. If its coinage has been prohibited, I am
in favor of having it resumed. I am in favor of having it enlarged."

SEC. 140. Prior to 1896 it is universally conceded that
an overwhelming majority of the people in this country

BIMETALLISM 79

were in favor of bimetallism at the old ratio of 16 to 1.
All political parties in framing their platforms were careful
to insert a plank in favor of the free coinage of silver.
The great leaders of the Republican party — Blaine, Gar-
field, Conkling, McKinley — in fact all the great leaders,
were pronounced bimetallists. In 1896, however, certain
influences were brought to bear upon the National Repub-
lican Convention sufficiently powerful to force through
the Convention a platform containing the following plank:
" The Republican party is unreservedly for sound money. It
caused the enactment of the law providing for the resumption of
specie payment in 1879; since then every dollar has been as good as
gold. We are unalterably opposed to every measure calculated to
debase our currency or impair the credit of our country. We are
therefore, opposed to the free coinage of silver except by international
agreement with the leading commercial nations of the world, which
we pledge ourselves to promote, and until such agreement can be
obtained the existing gold standard must be preserved. All our
silver and paper currency must be maintained at parity with gold,
and we favor all measures designed to maintain inviolably the
obligations of the United States, and all our money, whether coin or
paper, at the present standard, the standard of the most enlightened
nations of the earth."

SEC. 141. It will be seen that this plank recognized
the desirability of bimetallism, provided it could be
obtained through international agreement, and that it
pledged the party to promote such agreement. Had it
not been for this pledge, there is but little probability that
the party could have held its more pronounced bimetallic
members in line. Even with this pledge, hundreds of
thousands of Republicans forsook the party, formed Silver
Republican clubs and supported Bryan on a free coinage
platform for the Presidency. But the Republican party,
reinforced by the gold standard Democrats, and by the
expenditure of a fabulous sum of money (over $20,000,000
is said to have been expended by that party in the Presi-

80 BIMETALLISM

dential election of 1896) succeeded in electing McKinley.
The Republican party has now, however, passed com-
pletely under the control of the money power. No
pretense will hereafter be made that it favors even inter-
national bimetallism. It will hereafter stand uncondition-
ally for a single gold standard and rely upon the glamour
of wealth, the power of special privileges and the expen-
diture of large sums of money for its perpetuation in
power. Bimetallism is, with them, no longer an economic
question but a political one; the general welfare of the
people and the prosperity and development of the country
will not be considered; only the successes of the party
will be regarded.

SEC. 142. At the annual meeting of the Republican
League held in Omaha in July, 1898, a resolution was
adopted which clearly indicates the position the Republi-
can party will occupy on this question in the future.
These Republican Leagues are composed of ultra parti-
sans, of men who place the success of party above all
other things, of men who hold office, or who have been
promised an office and are impatiently waiting the fulfill-
ment of the promise, men, as a rule, who are profoundly
ignorant of the most elementary principles of political
economy, and yet they hesitate not to commit themselves
and the party they represent to a regime of perpetual
falling prices, to a perpetual concentration of wealth in
the hands of the few and of the perpetual debasement
and degradation of the many. The resolution adopted is
in the following words:

"We are uncompromisingly in favor of the maintenance of a
single gold standard, and that the medium of exchange, of whatever
form, issued by, or under the authority of the national government
shall be maintained at parity with gold, the universal standard of
the great commercial nations; and that every dollar coined or issued

BIMETALLISM 81

under national laws shall have an equal purchasing and debt-paying
power. We are unqualifiedly opposed to the free and unlimited
coinage of silver, and re-affirm the St. Louis platform on this
subject."

SEC. 143. It will be seen that this resolution does not
favor even international bimetallism, but is uncondition-
ally in favor of a gold standard and unconditionally
opposed to the free coinage of silver. That will be the
position of the Republican party in the future. That was
really its position in 1896, but certain provisos were
inserted which, by the money power, were understood to
be meaningless, but which kept many free silver
Republicans in line.

CHAPTER XI.

THE ADVANTAGES OF BIMETALLISM.
SEC. 144. Alexander Hamilton, in his report on the
Mint, says:

" To annul the use of either of the metals, as money, is to
abridge the quantity of circulating medium, and is liable to all the
objections that arise from a comparison of a full, with the evils of a
scanty circulation."

SEC. 145. Thomas Jefferson, in a letter to Mr. Hamil-
ton dated February, 1792, said: " I concur with you that
the unit must stand on both metals."

SEC. 146. Mr. Bagehot, in his testimony before the
Commission on the Depression of Trade (see International
Bimetallism, page 183), said:

" A great number of States which are grouped together in what is
called the Latin Union, have ceased to coin silver ever since the
year 1874, in the same manner which they did before. If it had not
been for that change of policy, the silver which is now flooding the
London market, and lowering the price would have been long since
in the mints of these countries; it would have released gold from
them, and the combined effect of the two operations would have
been that the comparative value of gold and silver would have been
very little altered, probably not at all."

SEC. 147. M de Normandie, Governor of the Bank of
France, a delegate to the Monetary Conference of 1881,
said:

"One sees demonstrated by facts, with crushing evidence, the
superiority of the double over the single standard. In 1837-38-

THE ADVANTAGES OF BIMETALLISM 83

39 a violent crisis raged in America. The Federal treasury withdrew
its deposits from the United States Bank, and, to establish the
metallic currency, inundated the English market with American
paper. At London the situation became extremely serious, and the
metallic reserve of the Bank of England fell from two hundred
million francs to seventy-five million. * * * The Bank
of England was even forced to recur to the Bank of France, which
loaned it fifty million francs in credit values; itself, thanks to the
French bimetallic system, scarcely feeling any shock from the
catastrophe at New York and London. In 1848 raged the wheat
crisis common to both countries. The Act of 1844 was suspended
in England; loans ran only for thirty days; numerous failures upset
the market, and discount arose to eight per cent. In France the
crisis was promptly alleviated by selling to Russia national RENTES
to the sum of fifty million francs, and discount was maintained at
five per cent. In 1857 a new monetary crisis, answering to the crisis
in America, occurs in France as in England; and this time, too, it is
much the less intense on the French side of the Channel. The
Bank of France is forced to raise its rate of discount to ten per
cent., but only for a fortnight; while the Bank of England, whose
gold had been in some sort drained by the United States, sees
itself constrained to maintain for six weeks its discount at the
excessive rate of ten per cent. * *

" In 1868 through the imprudent over-development of societies
with limited responsibility, a new monetary crisis manifests itself,
this time more intense. The Bank of England attacked by the
withdrawal of species from circulation and by the exhaustion of its
note reserve, again obtains the suspension of the Act of 1844 ; the
rate of its discount varies, between January and the following July,
between six, eight, and ten per cent. During this same year, the
mean rate of discount at the Bank of France is not above four and
one-half per cent. Thus in all the crises that have arisen at epoch
so diverse, in circumstances so different, one sees the Bank of
France less distressed than the Bank of England. In forty-five
years from 1837 to 1881, the former modifies the rate of discount
only one hundred times. The latter does this two hundred
and eighty-two times. We may affirm without rashness that
the French monetary system is not without influence in this result.
The power which France possesses of recurring, alternately or
simultaneously, to the two metals permits her not only to employ
the one or the other according to circumstances, and to allay the

84 BIMETALLISM

effects of their alternating scarcity, but also to come to the relief,
not without profit to herself, of those of her neighbors who want
now gold, now silver."
(See International Bimetallism, pages 196-7).

SEC. 148. Sir Guilford Molesworth, a distinguished
English economist and financier, in a speech delivered
before the International Monetery Conference of 1892, in
speaking of the effect o/ the gold standard in England on
the general prosperity of the people, pp. 142-3-4, said:

" The monetary system of England as a whole, has been from
the first to the last a source of inconvenience and danger, and
England has only been saved from serious disaster by the
Bimetallism of France, notably at the time when the discoveries in
California and Australia flooded Europe with gold. * *

" It must be evident to everyone who has studied the subject that
the English Monetary system is most unsatisfactory. In 1828 Mr.
Baring — no mean ruthority — pointed out the evils of our system,
recommending a return to the double standard, which he showed to
be less subject to those sudden jerks and changes so fatal to credit
nd to commerce. He urged that our single gold standard exposed
he country to stringencies which cramped the currency and
increased distress. * *

" During the seven years, 1883-1890, the Bank of France only
changed its rate of discount seven times, whilst the Bank of
England changed it sixty-two times, the variations in France only
amounting to two per cent., whilst those in England amounted to
four per cent. * *

" Then came the Baring failure, and our weakness was shown
by having to call France to our aid. The currency of France has
weathered, without difficulty storms to which the Baring failure
was mere child's play ; for example, the Franco-Prussian war, the
communistic struggle, the war indemnity, the'failure of the Panama
Canal, of the metal ring, and of the comptoir d' escompte.

" Fortunately England, although her currency was nominally
monometallic, practically enjoyed the benefit of Bimetallism, until
1873, except when she had to depend on gold for replenishing her
bank reserves, and when she had to make large remittances of silver
to India; and then she had to pay for her folly in the shape of an

THE ADVANTAGES OF BIMETALLISM 85

agio for the privilege of her choice of the particular metal she might
happen to require urgently. If she could have satisfied her
requirements by either metal, she would not have been put to this
expense. But so long as Europe, as a whole, remained practically
Bimetallic, England in all her vagaries was kept tolerably straight
by the double standard of France, which preserved the ratio of gold
and silver throughout the world, until the link was broken in 1873.
" I repeat, ' It is gold that is sick, not silver.' and unless this fact
be recognized by the members of this Conference it will be impossi-
ble to apply the proper remedy to the crisis which menaces us."

SEC. 149. Can there be any question as to which
monetary system is the best — one which requires but
seven changes in the rate of discount in seven years in
order to maintain an equilibrium in exchange, or one that
requires sixty -two changes in the same time? The
bimetallic system of France, as Mr. de Normandie says,
gave the Bank of France the power which she possessed
of " recurring alternately or simultaneously to the two
metals and permitted her not only to employ first one and
then the other according to circumstances and to allay the
effects of their alternating scarcity, but also to come to
the relief, not without profit to herself, of those of her
neighbors, who want now gold, and now silver." Since
1803 the monometallic Bank of England has repeatedly
been obliged to borrow money from the bimetallic Bank of
France to save itself from bankruptcy. Which is the
better system, one that is obliged to borrow money or one
that has mnney to loan in times of financial depression?

SEC. 150. Professor Jevons, in his "Money and
Mechanism of Exchange," page 141, says:

"As to the equilibrating action of the double standard, no one who
has inquired into the matter can doubt it any more than he can
doubt that one scale of a balance will go up when the other comes
down." (Quoted from " Internationa Bimetallism," page 133).

86 BIMETALLISM

SEC. 151. In his " Investigations in Currency and
Finance " page 304, Professor Jevons says:

" The French currency law has thus no doubt assisted to keep
gold and silver at a nearly invariable price, as compared one with
the other. * * * Although both gold and silver have, I
believe, suffered considerable depreciation, yet relatively they have
not varied more than five per cent. Some persons anticipated that
the fall in the value of gold would be indicated by a rise in the price
of silver, but they overlooked the fact that gold would spread itself
into the channels previously occupied by silver."

1 also quote from page 319 the following:

" I quite concede to MM. Wolowski and Cernuschi that the
bimetallic system does spread fluctuations of supply and demand
over a wider area. I have tried to explain in my book on ' Money
and Mechanism of Exchange,' that gold and silver, free from the
action of a legal ratio, are like two unconnected reservoirs of water,
each liable to be raised and lowered in level by various accidents.
Establish a communication between these reservoirs, and then each
new supply spreads itself over a double area, and each new demand
is supplied with less effect upon the general level. The legal cur-
rency ratio of 15^ to 1 actually does establish a communication of
this sort between the reservoirs of gold and silver in the world."
(Pp. 310-311.) In the latter part of the last century lS/2 to 1
correctly represented the natural ratio. For some fifty years it was
held pretty steady at this point by the action of the French
currency law." (Quoted from " International Bimetallism,"
Walker, page 133.)

SEC. 152. The advantage of bimetallism over the
single standard either of gold or silver, is perhaps as
clearly shown in the illustration given by Mr. Jevons
with his two reservoirs connected by a pipe as by any
illustration ever given. Mr. Jevons, like all other well
informed economists, recognized the fact that a sudden
fluctuation in the volume of money is something that
should be guarded against as far as possible, and he
admits that bimetallism would be a powerful auxiliary in
preventing sudden changes in its volume.

THE ADVANTAGES OF BIMETALLISM 87

SEC. 153. In his illustration, one of his reservoirs repre-
sents the volume of gold money now in stock, the other
represents the volume of silver money now in stock; the
pipe connecting the two reservoirs represents the free coin-
age of both metals at a fixed ratio and the investment of the
coins of both metals, equally and for all purposes, with
the money function. If at any time the production of
one of the metals should largely exceed that of the other,
as for instance, silver from 1803 to 1820, during which
time there was nearly four times as much in value of silver
produced as there was of gold, or the period intervening
between 1840 to 1860 when there was two and one-half
times as much in value of gold produced as there was of
silver, then, in either case, the metal of which there had
been the greater production, being poured into its reser-
vior, would flow through the pipe into the other reservoir
and each would be increased in volume in the same
proportion, and neither would fluctuate in value so much
as they otherwise would were it not for this equilibrating
force, and they would not fluctuate at all as measured by
each other. It very conclusively appears from this
illustration that so long as both metals are equally
invested with the money function at a certain legal ratio
and both have access to the mint on equal terms that it
is impossible for them to part company, and also, that the
mint ratio, fixed by law, will control the relative value of
the metals without any regard to the relative amount of
the metals produced.

SEC. 154. Notwithstanding this splendid illustration
given by Mr. Jevons, proving as it does, that the relative
amounts of the metals produced would have no influence
on their relative value so long as they have access to the
mint on terms of equality, yet Mr. Jevons, in connection
with the reasoning from which he deduces this conclusion,

88 BIMETALLISM

speaks about a natural ratio between the metals. He
says: " In the latter part of the last century 15 >£ to 1
represented the natural ratio. For some fifty years it
was held pretty steadily at this point by the French
currency laws."

SEC. 155. Although Mr. Jevons was one of the best
informed political economists of Europe, and although he
was usually correct in his conclusions, yet at times — when
attempting to sustain or justify certain economic errors —
as, for instance, gold monometallism, or his peculiar
theory of the cause of financial crises — he made the most
absurd blunders.

SEC. 156. The idea that there is, ever was, or ever
can be, such a thing as a natural ratio between gold and
silver, is as absurd as to suppose that there is a natural
ratio between beef and potatoes. The ratio at which the
two metals have been coined into money, is, and always
has been, a legal and arbitrary one, and not a natural
one. At the same time that the Roman Empire was
coining gold and silver at the ratio of 12 to 1, the Moors
in Spain were coining at the ratio of 6^ to 1 and other
nations in Europe were coining at ratios ranging from
7 to 1 to 11 to 1. At the same time the Oriental ratio
was about 6 to 1, but in all cases the ratio was a legal
and not a natural one. In all cases the ratio was simply
co-extensive with the boundaries of the kingdom formulat-
ing the law.

SEC. 157. That it is the law and not the relative amount
of the metals produced that controls the coinage ratio is
conclusively proven by a reference to the statistics of
production and ratio of coinage during the present century.
From 1803 to 1820 there was sixty-two times as much in
weight of silver produced as of gold, and if the relative
amount of production had controlled the ratio of coinage,

THE ADVANTAGES OF BIMETALLISM 89

the ratio should have been 62 to 1. From 1820 to 1840
there was thirty-one times as much in weight of silver
produced as there was of gold, and if the relative amounts
produced controlled the ratio during this period, the ratio
should have been 31 to 1. From 1840 to 1860 there was
but six times as much|in weight of silver produced as there
was of gold, and the ratio of coinage should have been 6
to 1. During all this time, however, the mint coinage
ratio of France of I5j>4 to 1 remained in force and con-
trolled the coinage ratio of the world, notwithstanding the
enormous fluctuations in the relative production of the
metals.

SEC. 158. It is only necessary to consider the facts
for a moment to become convinced of the absurdity of the
natural ratio theory. There is no more reason in Mr.
Jevons' natural ratio theory than there is in his attempt
on another occasion to account for financial crises as being
probably " connected with a periodic variation of weather,
affecting all parts of the earth, and probably arising from
increased waves of heat received from the sun at average
intervals of ten years and a fraction." Both of these
propositions are simply attempts to sustain certain economic
errors in spite of facts that prove their falsity. (See Sci-
ence Primer of Political Economy, by W. Stanley Jevons,
page 120).

SEC. 159. Mr. Gibbs in his Colloquy on Currency, p.
232, says:

" The difference which the law of dual legal tender would bring
about would be two fold. First, the silver which now comes into
England is a purchasable commodity, like wool or anything else,
and causes some additional employment of the currency of the
country ; whereas every ounce that would come in after our return
to the old law would be of itself money, and would be available, as
Sir Robert Peel said in 1844, for remittance abroad in discharge of
debt ; or else would supply withdrawals and render less necessary

90 BIMETALLISM

the frequent changes in the rate of discount; besides, probably,
maintaining the Bank: Reserve at a slightly hihger level.

" Secondly, the scramble for gold would cease. It exists now
and must continue, both because other nations have adopted gold as
their standard money in competition with us, and because they see
the gold price falling and don't know how low it may fall. There
was no such scramble before 1873, and no such accumulations.
France, for instance, had what was, under the then circumstances,
a sufficient store in the Bank, =£17,000,000 ; she now has =£68,000,-
000, while the Bank of England has but =£25,000,000."

SEC. 160. The world's production of gold since 1873
is estimated by our best statisticians at /434,570,000
sterling, of which two-thirds has been consumed in the
arts or exported to the Orient, leaving but ^145,000,000
for coinage purposes. Since 1873, there has been taken
out of circulation, and is now held in reserves of various
kinds, in war chests, and in national treasuries, gold as
follows:

In Germany =£115,000,000

Italy 20,000,000

Russia 70,000,000

Holland 4,000,000

United States 120,000,000

Scandinavia 10,000,000

Austria 6,000,000

Bank of France 19,000,000

Total =£364,000,000

The above figures are taken from " A Colloquy on
Currency," page 115, published in 1894, and refer to
conditions then existing. The amount now held in reserve
has been largely increased.

SEC. 161. This .£364,000,000 is a new demand for
gold created since 1873; nearly all of which is out of
circulation. A portion of the gold in the United States is
in circulation, but only a small portion. Except on the

THE ADVANTAGES OF BIMETALLISM 91

Pacific Coast very little gold is found outside of the
banks. Deducting the ^145,000,000 coined since 1873,
and making no allowance for loss by accident and private
hoards, we find an actual contraction in the metallic money
available for use, of ^219,000,000, (or $1,095,000,000).
SEC. 162. Professor John E. Cairnes, writing in 1860,
shows the decided superiority of bimetallism over a mone-
tary system based on either of the metals by preventing
those sudden and great changes in the value of the money
unit that would be liable to occur if either were adopted
as the sole standard of value. He says:

" The crop of gold has been unusually large ; the increase in the
supply has caused a fall in its value ; the fall in its value has lead
to its being substituted for silver? A mass of silver has thus been
disengaged from purposes which it was formerly employed to serve;
and the result has been that both metals have fallen in value
together, the depth of the fall being diminished as the surface over
which it has taken place has been enlarged."

SEC. 163. Professor Emile de Laveleye, who was one
of the foremost economists of Europe, in speaking of the
injustice resulting from the demonetization of silver,
increasing as it does the burdens of the wealth producers,
and particularly of the wrong done to the debtor classes,
said:

" In the Greek democracies, the legislators, and noticeably
Solon, reduced sometimes all debts by law, in order that the people
might not be brought to misery by usurers. After the discovery of
America and the placers of California and Australia, Nature, and
not law, reduced the weight of debts by increasing the quantity of
money. Today an arbitrary law has favored creditors in a most
unjust manner, inasmuch as everywhere — as in England before
1816 — the people had previously the right to pay their debts in
either metal, whereas they are now forced to pay exclusively in
gold, at a time when that metal is becoming more and more scarce.
What could be more odious? * * Let us hope the future

92 BIMETALLISM

leaders of the English democracy will see that the iniquitous
monopoly accorded to gold, sacrifices the most active part of the
nation to the idle part, and that they will restore to the two precious
metals the role which science, history, commerce, and the free
consent of the peoples had guaranteed them throughout the past."
(See Report International Monetary Conference, 1892, p. 264).

CHAPTER XII.

BIMETALLISM IN FRANCE.

SEC. 164. France established the ratio of 15}^ to 1
between siiver and gold in 1785. It was understood at
the time of the adoption of this ratio that gold was over-
valued, and such overvaluation of gold was made for the
express purpose of attracting gold into the kingdom. In
1790, a commission having been appointed to inquire into
and ascertain the actual relative value of the two metals,
recommended that the value of gold be reduced and the ratio
fixed at 14.87 to 1, for the reason that the ratio adopted
in 1785 encouraged the exportation of silver. The recom-
mendation of the committee was not concurred in. Again,
in 1803 an effort was made to bring the coinage ratio
nearer to that of the ratio of the surrounding nations, but
after an extended discussion the ratio of 15^ to 1 was
re-enacted and still remains the coinage ratio of France.
In 1790 the coinage ratios of the surrounding States was
as follows*

England 15.23 Austria 14.52 Geneva 14.71

Holland 14.44 Saxony 14.77 Venice 14.82

Flanders 14.51 Tuscany 14.51 Genoa 14.91

(See International Monetary Com., 1878, p. 280).

SEC. 165. It will be seen from the above that not one
of the surrounding States gave gold as high a valuation as
the French ratio adopted in 1785 and re-adopted in 1803.

94 BIMETALLISM

The nearest approximation was in England, where the
ratio was 15.23, all of the other ratios being below 15 to 1.
It will also be seen that the oft-repeated statement that the
ratio of 15*4 to 1 was adopted by France in 1803 because
that was, at the time, the exact commercial ratio, is in
keeping with the assertion that the ratio adopted in the
United States in 1792 was the commercial ratio at that
time, and that neither of said statements has any founda-
tion in fact.

SEC. 166. Mr. Gibbs, in the Appendix to his '• Collo-
quy on Currency," Table G, publishes a tabulated state-
ment showing the highest and the lowest agio (premium)
on gold and silver at the Bank of France for each month
from January, 1821, to June, 1894, both inclusive. It
appears, from this tabulated statement, that at no time
between January 1, 1821, and September 1, 1873, was
silver at a discount; that for seventeen months silver was
at par; for twelve months of the time there were no quo-
tations on silver, and that for the remaining 603 months
silver commanded an agio or premium ranging from 1 per
mille to 38 per mille; that for fifteen months there were
no quotations on gold, for thirty-three months gold is
quoted at par, for forty-nine months gold is quoted at a
discount ranging from y2 per mille to 3^ per mille, and
that for the remaining 535 months gold is quoted at a pre-
mium ranging from y2 per mille to 20 per mille, except
for the months of March, April and May, 1848, when the
maximum agio on gold reached 65 per mille for March and
April, and 24^ per mille for May.

SEC. 167. The large agio on gold in March, April and
May, 1848, was occasioned by the large advances the
Bank was required to make to the Provisional Govern-
ment and to the City of Paris on account of the revolution
of 1848 and has no economic significance. The agio on

BIMETALLISM IN FRANCE 95

gold, except for the months of March, April and May,
1848, at no time between 1821 and 1873 exceeded 20 per
mille, or 2 per cent. The option to pay in gold or silver
was with the Bank, and the Bank hesitated not to exer-
cise this option. If England, for instance, required a large
amount of silver for Indian export and drew on the Bank
of France for silver, the Bank could, and did, demand a
premium which England was obliged to pay to obtain it.
If, at another time, or at the same time, some other coun-
try required gold for certain purposes and drew on the
Bank of France for gold, the Bank could and did demand
a premium on gold.

SEC. 168. It will be seen by reference to the tabulated
statement that sometimes the agio was greater on gold
than on silver, sometimes greater on silver than on gold,
and that for more than nine-tenths of the time intervening
between January 1, 1820, and September 1, 1873, the
Bank of France could, on account of the bimetallic law of
France, which gave the debtor the option of payment in
either metal, demand and enforce the payment of a pre-
mium on either of the metals, or on both at the same
time, when either might be required from any country
that had but one of the metals in stock.

SEC. 169. Mr. Gibbs, in his "Colloquy on Currency,"
page 50, in discussing Bimetallism in France, and in
reviewing the position taken by Mr. Giffen, says Giffen
is wrong when he says that France was practically on a
silver standard from 1803 to 1850. He also says:

" That Currency, the money chiefly in use, is one thing, and the
legal money standard another. Whatever might have been the
money in current use in France in those years matters not at all,
provided that the mint was open for the coinage of both metals
equally at a fixed ratio with vis liberatrix. * * What has
the absence or presence of Gold in France to do with the matter?

96 BIMETALLISM

The law gave a certain choice to the debtor. If there were no gold
to be got, he certainly would not trouble himself about paying
in gold."

SEC. 170. Mr. Huskisson, writing in 1826, says that
at no time between 1803 and 1826 had the agio on gold
coin in France exceeded one-fourth per cent; that some-
times there was no agio at all. Sometimes there was an
agio on silver and sometimes there was an agio on both
gold and silver at the same time. Mr. Gibbs says that
the agio resulted from a demand for export. Under the
law of France, no man could demand specifically gold or
silver, but only money; the option to pay in the coins of
either metal was with the debtor. (See " Colloquy on
Currency," page 103).

SEC. 171. It is claimed by monometallists, at least by
some of them, that the French law utterly failed to main-
tain a parity between the metals, and that its failure is
conclusive evidence that bimetallism is an impossibility.
They point to the quotations and the price of silver
bullion in the London market for each of the years from
1803 to 1873 and gravely inform us that as it seldom
happens that for two consecutive years the quotations are
exactly the same, it is evident that the French law was a
failure, and that any law which may attempt to maintain
a parity will be a failure. They concede that the fluctu-
ation in the price of silver from year to year was not
great, seldom exceeding one or two cents on the ounce,
but that it was enough, they say, to prove the impossibility
of maintaining the parity at any ratio. The difficulty
with these gentlemen is that they do not distinguish
between money and a piece of metal.

SEC. 172. What bimetallism proposes to do is not to
maintain an exact parity between gold and silver bullion,
but between gold and silver coin, fabricated from the

BIMETALLISM IN FRANCE 97

bullion, at a fixed ratio. This it has done, and this it can
do. Under a proper bimetallic law there will be but
trifling fluctuation in the relative values of gold and silver
bullion, even in countries still under the monometallic
regime; and no fluctuation in the value of the money
coined from them in the country where the bimetallic law
prevails.

SEC. 173. I now propose to show that the fluctuation
shown in the quotations of the price of silver bullion in
the London market arose from two causes: First, imper-
fection in the French law itself; and, secondly, from costs
accruing and expenses incurred in transporting bullion to
and from the French mint.

SEC. 174. A bimetallic law, in order to produce perfect
results, must place the metals upon an exact equality at
the designated ratio. This the French law did not do. It
fixed the ratio between gold and silver coins; it conferred
upon those coins equally the money function, but it did not
fix, nor attempt to fix, any ratio between gold and silver
bullion. It provided that the silver in the silver five-franc
piece should weigh fifteen and one-half times as much as
the gold in the gold five-franc piece. This ratio has been
maintained without variation since 1803. The mint price
of the bullion has, however, undergone various changes.
The mint charges for coining gold and silver bullion were
fixed in the law of 1803 at 9 francs per kilogram of stand-
ard gold, and 3 francs per kilogram of standard silver.
The kilogram of standard silver contains 200 francs, and
that of standard gold 3,100 francs. The mint rate,
therefore, stood under the French law as approved in
1803, not 15^ to 1, but as 3,091 to 197, or 15.69 to 1.
In 1835 the mint charge on silver was reduced to 2 francs
per kilogram, and on gold to 6 francs. The mint ratio,
therefore, became as 3,094 to 198, or 15.626 to 1, and so

7

98 BIMETALLISM

remained until 1850. In 1850 the mint charge on silver
was reduced to 1 franc 50 centimes per kilogram. The
mint ratio, therefore, became 3,094 to 198.50, or 15.586
to 1, and so remained until 1854, when the mint charge
on gold was raised to 6 francs 70 centimes per kilogram.
The mint ratio, therefore, became as 3,093.30 to 198.50,
or 15.583 to 1, at which rate it now stands. (See Inter-
national Monetary Conference of 1878, page 687).

SEC. 175. It is impossible, even in a bimetallic country,
to maintain the exact ratio between gold and silver bullion
that is fixed by law as the ratio of gold and silver coins,
unless the coinage is gratuitous, or unless the seigniorage or
mint charge is an ad valorem charge calculated on the
value of the bullion. That is to say: If the ratio between
the coins is 16 to 1 the mint charge for coining an ounce of
gold should be 16 times as much as the mint charge for
coining an ounce of silver. The mint charge must be
upon value and not upon weight. In no other way can
the bullion value of the two metals be kept exactly at
the coinage ratio. The fluctuation will not be great, will
seldom exceed the difference between the actual charge
and an ad valorem charge for the fabrication of the coins.
This becomes evident when we observe the effect of
slight changes in mint charges under the French bimetallic
law of 1803.

SEC. 176. In an able article in the Quarterly Journal
of Economics, January, 1896, by Professor Willard Fisher
of the Wesleyan University, discussing the causes of
fluctuations in the value of silver bullion between 1803
and 1873 and reviewing a previous article of Professor
Laughlin's, Professor Fisher says:

" Professor Laughlin utterly fails to grasp what Bimetallists
claim for, and expect from, their system ; and he makes the same
mistake made by Mr. Robert Giffen in his 'Case Against
Bimetallism.'

BIMETALLISM IN FRANCE 99

" They both think that if the French law of 1803 had any effect
upon the market value of the precious metals, it must have kept
the commercial ratio at exactly 15>^ to 1 ; and, in citing the familiar
fact that the market figures fluctuated up and down, but rarely, if
ever, coincided with the mint ratio, they complacently assume that
they have refuted the historical argument for Bimetallism. But it
is absolutely certain that no such identity of ratios could be expected
even by the most confident Bimetallists. So long as there are
seigniorage charges, freight charges, insurance fees, or any other
expenses involved in passing metal through the mint, the nominal
legal ratio is never the effective mint ratio. The inefficiency of the
French law in steadying the relative value of the precious metals
can never be proved by citing differences between the market ratio
and the nominal legal ratio, unless it be shown that the differences
are greater than may be accounted for by : (1) Seigniorage and all
other mint charges ; (2) Cost of transporting the metal from the
market whose ratio is cited to the mint; (3) Fees for insurance
during transit; (4) Agents' commissions; (5) The interest on
capital temporarily locked up ; (6) Exigencies or sudden and urgent
demand. But no man has ever so much as attempted to examine
thus fully the deviation of the London market from the French
mint ratio. Let just a simple hint as to the effects of these various
charges and expenses suffice."

SEC. 177. Sir Guilford Molesworth, delegate from
British India to the International Monetary Conference of
1892, in an address to the Conference, (see page 225) in
speaking of the influence of the French law of 1803 in
holding the metals together, said:

" Now let us see what France has accomplished almost single-
handed. For seventy-three years she has kept the whole world
practically bimetallic. It is true that during the last few years of
that period she was helped by the Latin Union, but she was the
moving spirit. She preserved the equilibrium of gold and silver
approximately stable at the ratio of 1 to 15^, in spite of almost
overwhelming influences tending to disturb the equilibrium. First,
the American ratio for a long period, was 3X per cent, higher, and
for another period 3X per cent, lower than the French ratio. At
one period the relative production of gold was 65 per cent, less than
that of silver ; at another period it was more than 200 per cent.

100 BIMETALLISM

greater. At one time silver coinage almost ceased ; at another time
gold coinage almost ceased. At various periods England, whose
obligation could only be satisfied in gold, was, as Baring has told
us, forestalled by others speculating on the bank's own necessities.
At other periods, Germany and India, whose obligations could only
be satisfied with silver, were exposed to similar influences tending
to create an agio on the metal that might happen to be urgently in
demand. * With such remarkable experience to guide us, it
appears probable that the United States of America, if they had the
courage to make the plunge, might keep the equilibrium single-
handed; at all events, a combination with the Latin Union, would
place the matter beyond a doubt. The addition of India and
England would make the combination unnecessarily strong. Other
nations might, or might not join, but their adhesion or abstention
would be a matter of no practical importance, for with such a
combination the world would be practically bimetallic."

SEC. 178. The discovery of gold mines in California
and Australia resulted in the production of such vast
quantities of gold that the creditor classes set on foot a
scheme for its demonetization. These gentlemen, at that
time, as afterwards in 1873, becoming alarmed at the
thought that by means of the abundant money the debtors
might possibly be able to discharge their obligations, and
become, in fact as well as in name, free men, inaugurated
a war of extermination against gold, and they succeeded
in inducing Holland, Belgium, Austria and several of the
German States to demonetize their gold coins. Russia,
at that time a heavy producer of silver, influenced by the
same arguments, passed an edict preventing its exporta-
tion from Russia. France, however, refused to become a
party to this scheme of demonetization, and adhered
strictly to her cherished principle of bimetallism, and it
was soon found that as long as France kept her mints
open to the unlimited coinage of both gold and silver at
her ratio of 15^ to 1, it was impossible for gold to fall
much below that ratio. M. Chevalier, the leading mono-

BIMETALLISM IN FRANCE 101

metallist of France, admitted that the maximum effect of
the gold discoveries of California and Australia was to
change the silver price of that metal 4>£ per cent. ; and
Professor Jevons, a gold standard advocate of Great
Britain, says that the whole permanent effect of the
California and Australian discoveries was not above Ij4
per cent. When we take into consideration the fact that
in the short space of twenty years the gold money of the
world was doubled by these discoveries, and that several
nations, frightened with the doleful cries of the money
lords, demonetized their gold coins and threw their stock
of gold upon the market, and that during the same time,
but very little silver comparatively speaking was pro-
duced, and notwithstanding all these facts, France with
her bimetallic law of 15^ to 1, unaided and alone was
able to hold the commercial values of the two metals
comparatively steady in all the markets of the world,
and that the whole permanent effect of all these causes
combined did not cause the value of gold as measured by
silver to decline more than 1)4 per cent., who will have
the hardihood to say that the bimetallic law of France
was a failure?

CHAPTER XIII.

GOLD STANDARD IN ENGLAND.

SEG. 179. That the gold standard has been a curse to
England, and to every other country where it has been
adopted as the sole standard of value, there can be no
question. The act demonetizing silver in England was
adopted in 1816. At that time the money in use in
England was depreciated inconvertible paper money.
Specie payments had been suspended in England in 1797,
and were not resumed until several years after the
demonetization of silver. A very interesting and instruc-
tive account of the fluctuations in the value of paper
money during the period of suspension of specie pay-
ments is given by Leonard H. Courtney in the article on
Banking in the Ninth Edition of the Encyclopedia
Britannica, Vol. III., page 320, from which I quote the
following:

" It had been generally supposed, previous to the passing of the
' Restriction Act ' that bank-notes would not circulate unless they
were immediately convertible into cash. But the event showed
that this was not really the case. Though the notes of the Bank of
England were not at the passing of the ' Restriction Act' declared
by law to be legal tender, they were rendered such in practice, by
being received as cash in all payments on account of Government,
and by the vast majority of individuals. For the first three years of
the restriction, their issues were so moderate that THEY NOT ONLY
KEPT ON A PAR WITH GOLD, BUT ACTUALLY BORE A SMALL
PREMIUM. But in 1801, and 1802, and 1803, they were so much

GOLD STANDARD IN ENGLAND 103

increased that they fell to a discount of from eight to ten per cent.
In 1804 they again recovered their value ; and from that year to
1808, both inclusive, they were at a discount of 2^ per cent. In

1809 and 1810, however, the directors appear to have embarked on a
new course, and to have entirely lost sight of the principles by
which their issues had previously been governed ; for the average
amount of bank-note circulation, which had not exceeded 17^
millions nor fallen short of 16)4 millions in any one year from 1802
to 1808, both inclusive, was in 1809 raised to £18,927,833, and in

1810 to £22,541,523. The issues of country banks were increased in a
still greater proportion; and as there was no corresponding increase
of the business of the country, the discount on the bank-notes rose
from 2% in 1808 to from 13 to 16 per cent, in 1809 and 1810. +

In 1812 it was at an average discount, as compared with bullion, of
20 per cent; in 1813, of 23 per cent.; and in 1814, when the
maximum of depreciation was attained, it was at 25 per cent."

SEC. 180. The above facts afford conclusive evidence
that it is not necessary that paper money should be
redeemable in coin in order to maintain its value, but that
its value is determined by its volume; and also proof of
the fact that, if sufficiently limited in volume, it will com-
mand a premium in gold coin.

SEC. 181. The Resumption Act of 1819, commonly
called "Sir Robert Peel's Act," provided that specie
resumption on a gold basis — silver having been demone-
tized in 1816 — should take place in 1823. In order to
accomplish specie resumption it was well understood that
it would be necessary not only to contract the volume of
money but also to contract credits, and accordingly the
policy of contraction was vigorously prosecuted. Sir
Archibald Alison describes the effects of the monetary
legislation of this period upon the people in general and
upon the country, and shows that everybody except the
great capitalists was injured, but that capitalists fattened
on the spoils. He says:

104 BIMETALLISM

" The capital which had been realized during the war [with
Napoleon] had been so great, the influence of the moneyed interest
so powerful, that the Legislature became affected by the desires of
its possessors. The monetary bill of 1819, before many years had
elapsed, added 50 per cent, to the value of money and weight of
debt and taxes. + Small landed proprietors were generally
ruined from the fall of prices ; the magnates stood forth in increased
luster from the enhanced value of their revenues. Industry was
querulous from long continued suffering ; wealth ambitious from
sudden exaltation." (See Continuation of History of Europe,
Volume 1, page 3).

He also says:

" The effects of this sudden and prodigious contraction of the
currency were soon apparent, and they rendered the next three
years a period of ceaseless distress and suffering in the British Isles.
The accommodation granted by the bankers diminished so much, in
consequence of the obligation laid upon them of paying in specie,
when specie was not to be got, that paper under discount at the
Bank of England, which in 1810 had been ^23,000,000 and in 1815
not less than £20,660,000, sank in 1820 to ^4,672,000, and in 1821
to =£2,722,000. The effect upon prices was not less immediate and
appalling. They declined in general within six months to HALF
THEIR FORMER AMOUNT, AND REMAINED AT THAT LOW LEVEL
FOR THE NEXT THREE YEARS. Distress was universal in the
latter months of 1819 ; and that distrust and discouragement was
felt in all branches of industry, which is at once the forerunner and
the cause of disaster."

SEC. 182. Sir James Grahan in his work entitled
" Corn and Currency," published in 1826, says:

" Whether we regard private debts or public burdens, the effects
of the measure of 1819 have been to enact that for EVERY LESS
SUM OWING A GREATER SHALL BE PAID; prices falling, but
pecuniary engagements remaining undiminished, the farmer has no
profit, the landlord no rent, the manufacturer no customer, the
laborer no employment ; a revolution of property and a derange-
ment of the whole frame of society must necessarily ensue. +
Amidst the ruin of the farmer and the manufacturer, the distress of
the landlords, and the insurrections of the populace without bread

GOLD STANDARD IN ENGLAND 105

and without employment, one class flourished and was triumphant ;
the annuitant and the tax-eater rejoiced in the increased value of
money; in the sacrifice of productive industry to unproductive
wealth, in the victory of the drones over the working bees."

SEC. 183. Senator Jones in his October, 1893, speech,
page 241, in discussing the evil effects resulting from the
adoption of the gold standard in England, says:

" At the demand of the creditor classes the gold standard was
adopted in England after the Napoleonic wars, in order that the war
debt, a large portion of which was incurred in paper, might be paid
in gold. In his Financial History of England, Mr. Doubleday
states his belief that for a portion of the war period the pound note,
with which the public securities of Great Britain were bought, was
not worth in specie over 7 or 8 shillings in the pound — about 33 to
38 per cent. The debt being afterwards by law made payable,
pound for. pound in gold, it is obvious that the bondholders of
Great Britain mulcted the people of that country, as, at a later
period, the public creditors of the United States mulcted the people
of this country."

SEC. 184. At the time of the adoption of the Resump-
tion Act in 1819 there were 160,000 land-owners in Great
Britain, in seven years in consequence of the ruinous fall
in prices, the land-owners had been reduced to 30,000.
In the short space of seven years 130,000 men, who,
prior to 1819 were prosperous and happy as landed
proprietors, were reduced to the position of tenants on
land they formerly owned, or turned adrift to wander as
vagabonds over the face of the earth. This is a part of
the price paid by England for her gold standard, but a
part only as the distress in every branch of industry,
occasioned by those twin acts of infamy, that of 1816 and
1819, were nearly as great, and have only been equalled
by the wrong and injustice inflicted on humanity by those
other two infamous acts of legislation in this country —
the acts of 1873, which struck the silver dollar from the
list of coins and that of 1874, which deprived it of its
legal tender, debt-paying power.

CHAPTER XIV.

DEPRECIATION OF SILVER.

SEC. 185. People wonder why miners can still pro-
duce silver when silver, they say, has fallen in value 50
per cent. The difficulty in their reasoning is that their
premises are false. Silver has not fallen in value 50 per
cent. The purchasing power of silver was as great in
1893 as it was in 1873. Since 1893 it has declined in
value somewhat, but not nearly as much as gold has
appreciated in value. The divergence in value between
the metals has been caused chiefly by an appreciation in
the value of gold.

SEC. 186. Sir Guilford Molesworth in the 1892 Inter-
national Monetary Conference, page 139, said:

"A very distinguished member of this Conference has likened
silver to a sick man whose state has been but aggravated by the
medicines which have been administered to cure him; but I think
that this is not surprising, inasmuch as the physicians have not
merely mistaken the character of the illness, but they have mistaken
the invalid. It is gold who is the sick man, not silver. They have
mistaken the bloated condition of gold for a symptom of health,
whereas it is the symptom of a dangerous disease which now
threatens to develop into a fearful crisis, which, as M. de Rothschild
says, would be frightful to contemplate."

SEC. 187. Professor Marshall, in his testimony before
the Royal Gold and Silver Commission in answer to
Question 9,625, said:

"As regards the depreciation of silver, I am rather puzzled by the
statement in the warrant appointing the Commission that it is to
inquire into the depreciation of silver. I do not admit that silver
has depreciated in the sense that it has less general purchasing
power. I think it has appreciated and has now higher purchasing
power as regards commodities than it had before." (Quoted from
Walker's International Bimetallism, page 216).

GOLD STANDARD IN ENGLAND 107

SEC. 188. The London Statist, November 5, 1892,
contained the the following:

" We have seen that between 1873 and 1890 all gold prices fell
ruinously. We have also seen that during the same period silver
prices did not fall; in other words, that while a smaller quantity of
gold year after year, exchanges for a larger quantity of all other
commodities, silver included, the same quantity of silver, or nearly
the same exchanges for the same quantity of all other commodities,
gold excluded. Does it not necessarily follow that it was the
conditions which determined the value of gold, which altered,
and not the conditions which determined the value of silver, or to
put the matter in perhaps plainer language, does it not necessarily
follow that the value of silver during the last twenty years has been
far more stable than the value of gold?"

SEC. 189. Prior to the closure of the Indian mint in
1893, the purchasing power of silver as measured by
commodities had not fallen at all. It is probable that
since that time there has been a slight depreciation, but
not enough to check the production of silver. The value
of silver produced in 1893, rated at the ratio of 16 to 1,
was $214,000,000. The value of that produced in 1896
was $213,000,000, substantially the same. In 1897 it
was $236,730,300.

SEC. 190. It is impossible to tell whether gold has
appreciated in value, or whether silver has depreciated,
by comparing the two metals with each other. We know
that the ratio between the metals in 1873 was about 15^
to 1, and we know that now it is about 34 to 1. We see
that a great divergence between the values of the two
metals has taken place. This divergence might have
been caused either by a fall in the value of silver, or by
a rise in the value of gold, or there may have been
changes in the value of both of them producing this result.
We can determine which has changed in value, or pur-
chasing power, only by comparing each of them with

108

BIMETALLISM

commodities. If we find that gold will exchange for the
same or for nearly the same amount of commodities now
that it would in 1873, and that silver will exchange for
only about one-half as much as it would at that time,
then we must conclude that silver has fallen in value as
measured by commodities 50 per cent. ; if, on the contrary,
we find that silver as measured by commodities has the
same purchasing power, or nearly the same as it had in
1873, and that gold on the average will exchange for
twice as much as it would in 1873, then we must find
that gold has appreciated in value 100 per cent.

SEC. 191. Professor Nicholson in his "Money and
Monetary Problems," page 135, gives the following list of
articles and the value of each as measured by gold bullion
and by silver bullion in 1867-77 and in 1893:

TABLE I.

Ten ounces of silver at the average price in | 1867-68

1893

Would exchange for Lbs. Lbs.

English Wheat 429 54T

Town-made Flour 299 319

German Beet Sugar 299 222

Common Bar Iron 667 665

Mid. up. Cotton 65.5 77

English Lead 269 341

English Wool 30 35

Leather 37 24

TABLE 11.

123.27 grains of standard gold at the average price of j 1867-77 1893

Would exchange for Lbs. Lbs.

English Wheat 171 349

Flour 122 215

Sugar 93 149

Iron 272 448

Cotton 26.6 52

Lead 109.3 229.7

\Vool 12 15 23.4

Leather 15 18.6

GOLD STANDARD IN ENGLAND 109

SEC. 192. It will be seen from the above tables that
silver as measured by commodities had not declined in
purchasing power prior to 1893, but had slightly appreci-
ated, and that gold had nearly double the purchasing
power in 1893 that it had in 1867-77. Does not this con-
clusively prove that the divergence between the metals
has been caused not by a depreciation in the value of
silver, but by an appreciation in the value of gold, and
that Sir Guilford Molesworth was right when he said it
was gold that was the sick man? And is it not, also,
conclusively shown by the above facts that silver has
been much more stable in value since 1873 than gold?

SEC. 193. The average prices of commodities are
determined by "Index Numbers" calculated on the
average wholesale prices of a large number of commodities
extending over a series of years. Tables of " Index
Numbers" have been prepared by different statisticians,
and while they substantially agree, yet those prepared
by Mr. Sauerbeck are usually regarded as having been
prepared with greater exactness than those by other
statisticians.

SEC. 194. Mr. Sauerbeck's "Index Numbers" are
calculated from the annual average wholesale price of the
following forty-five commodities:

English wheat Pig-iron Copper Flour

American wheat Iron bars Tin Barley

Prime beef Java sugar Lead Oats

Middling beef Coal (London) Jute Maize

Prime mutton Coal (export) Silk Potatoes

Middling mutton Wool (Merino) Hides Rice

Coffee (two sorts) Wool (English) Leather Pork

Tea (two sorts) Soda crystals Tallow Bacon

West India sugar Petroleum Seed oil Butter

Nitrate of soda Palm oil Indigo Flax

American cotton Olive oil Timber Hemp

Indian cotton

SEC. 195. The basis of comparison is the average
annual wholesale price of the forty-five commodities for

110

BIMETALLISM

the eleven years 1867-77 inclusive. The average price
is represented by the symbol 100; and variations from
this figure above or below indicate the average rise or
fall above or below the average price of the eleven years.

SEC. 196. The eleven years 1867-77 inclusive include
the four years of low prices succeding the panic of 1866,
the three years of rising prices, 1871-73, and the first
four years of the great fall which has occurred since 1873.

SEC. 197. The purchasing power of gold and the
purchasing power of silver rated at their commodity or
"market value" compared with the basis or symbol
number, 100, representing the average price for the
period 1867-77 is shown in the following "index numbers:"

DEPRECIATION OF SILVER

Year

Forty-Five
Commodities

Purchasing Power
of Gold

Purchasing Power
of Silver

1867-77

100

100

100

1870

96

104.6

103.7

1871

100

100.7

99.7

1872

109

91.7

91

1873

111

90

88.7

1874

102

98

93.9

1875

%

104

97.2

1876

95 105.2

91.3

1877

94 106.3

96

1878

87 115

99.3

1879

83

120.5

104.4

1880

88

113.6

97.6

1881

85

117.6

100

1882

84

119.2

101.2

1883

82

122

101.3

1884

76

131.5

101.6

1885

72

139

111

1886

69

145

108

1887

68

147

107.7

1888

70

142.8

100.6

1889

72

138.8

98.9

1890

72

138.8

108.9

1891

72

138.8

102.9

1892

68

147

96

1893

68

147

85.7

See Joint Standard, page 84.

GOLD STANDARD IN ENGLAND 111

SEC. 199. Prices reached their maximum in 1873. In
that year the average price of the forty-five commodities
was eleven one-hundredths higher than the average of
the 1867-77 prices. As compared with this rise in prices,
of course, the purchasing power of both gold and silver
declined and in 1873 the purchasing power of gold as
compared with the higher prices then prevailing is shown
by the index numbers to have been 90 and the purchas-
ing power of silver to have been 88.7.

SEC. 200. The decline in prices in 1874 was from 111
to 102, or from 11 above to 2 above, and, of course, there
was a corresponding rise in the purchasing power of both
gold and silver. From that time until the close of the
year 1893 gold appreciated "in purchasing power as com-
pared with its purchasing power in 1867-77. It appre-
ciated from 100 to 147, and, as compared with its
purchasing power in 1873 it had appreciated from 10
below to 47 above, or fifty-seven one-hundredths, or 63
per cent. Silver in the meantime had fallen from 11 and
three-tenths below to 14 and three-tenths below, or three
one-hundredths, or 3 per cent., although most of the time
it had been above the 100 mark, and never below the
87.7 mark at which it stood in 1873, until 1893, so that
prior to 1893 silver had lost none of its purchasing power
as measured by commodities, and prior to that time the
divergence between the metals had been caused solely by
an appreciation in the value of gold.

CHAPTER XV.

INFLATION OF PRICES FROM BIMETALLISM.

SEC. 201. It is insisted by the gold standard advocates
that bimetallism would lead to a great inflation of prices;
that such inflation would unsettle business; that it would
impair the obligation of contracts, and that creditors would
be wronged and defrauded to an extent equal to the
advance in the price of silver bullion that would ensue on
the adoption of bimetallism. They also insist that every-
thing has become adjusted to the gold standard, and that
it would be in violation of the principles of honesty and
fair dealing to go back to the regime that obtained prior
to 1873.

SEC. 202. Is there any force in these objections?
Would bimetallism cause an inflation in prices? If it
would not, then, of course, all the other objections fall to
the ground, as they are predicated on the assumption
that bimetallism would cause an inflation of prices and
that the calamities predicted would necessarily follow
such an inflation.

SEC. 203. We have already seen that prices are regu-
lated by the amount of money available for use, that as
the volume of money is increased, other things remaining
the same, prices will rise, and as the volume of money is
diminished prices will fall. We have also seen that all
money available for use, which is commonly accepted in
exchange for services or property and in payment of

INFLATION OF PRICES 113

debts, whether so accepted by force of law (that is, its
legal tender property) or by common consent, act on
prices, and that it all acts in precisely the same manner,
whether gold, silver or paper, and whether it is converti-
ble or inconvertible, and without any regard whatever to
the material of which it may be composed; and that the
assumption that only standard money acts on prices is
fallacious and as utterly without foundation in fact, as is
the assumption promulgated by a distinguished gold
standard advocate that financial crises are caused by
" waves of heat received from the sun."

SEC. 204. The only question, therefore, to be consid-
ered is: Would bimetallism increase the amount of money
available for use? If it would, and if the increase in the
volume of money was greater than the increase in popu-
lation and business, then prices would rise, but if it did
not increase the volume of money faster than population
increased and new business developed and new demands
for money were created, prices would not rise.

SEC. 205. The Director of the Mint in his Annual
Report for the fiscal year ending June 30, 1898, on pages
48-49, estimates the coined silver in the world at that time
(January 1,1898) at $3,977,500,000. Of this sum he es-
timates that $3,276,100,000 is full tender money and $701,-
400,000 limited tender money. Of the full tender silver
money he estimates that $1,817,400,000 is in Asia, $743,-
200,000 in Europe, $561,500,000 in the United States,
and $154,000,000 in the rest of the world. Of the limited
tender money he estimates that $570,200,000 is in
Europe, $76,700,000 in the United States, and $54,900,-
000 in the rest 'of the world. (In order to make the full
tender silver money in the United States amount to the
sum of $561,500,000, the Treasury Department adds to
the estimated amount of silver dollars $99,548,611 worth

114 BIMETALLISM

of silver bullion purchased under the provisions of the
Sherman Act and still remaining uncoined. Probably no
one outside of the Treasury Department would even sus-
pect that this uncoined silver bullion is money, much
less full legal tender money; yet it is so counted and
classified by the Treasury Department. See pages 42-43
Report of Director of Mint, 1898; also page 156, Report of
the Secretary of the Treasury, 1898. ) The full tender
silver money of Europe and the United States is now cir-
culating side by side with gold coin, and is discharging
the money function at its nominal or face equally as well
as gold coins. The European full tender silver money
has been coined at the ratio of about 15^ to 1, or at the
rate of about $1.33 per ounce; the full tender silver
money of the United States has been coined at the ratio
of 16 to 1, or at the rate of $1.29 per ounce, and the
limited tender silver money in both Europe and the United
States has been coined at a ratio still more favorable to
silver.

SEC. 206. The limited tender silver money in both
Europe and the United States is also circulating side by
side with gold and discharging the money function to all
intents and purposes as well as gold. Twenty silver shil-
lings in England are just as valuable for monetary pur-
poses as a gold sovereign. Four silver five-franc pieces
in France will buy as much of any commodity and dis-
charge as much indebtedness as a gold twenty-franc
piece, and in the United States ten silver dollars, or
twenty half-dollars, are as valuable as money — will buy
as much commodity, or pay as much debt, as a gold
eagle.

SEC. 207. The silver money of Europe and America is
today discharging the money function at its nominal or
face value equally as well as gold, and it is the sheerest

INFLATION OF PRICES 115

nonsense to say that bimetallism would increase the
efficiency of this money, as a factor on prices.

SEC. 208. The $1,817,000,000 in silver money in
Asia is all or nearly all the money they have, and it is all
in circulation and discharging the money function at a
coinage ratio of about 15 to 1, or at the rate of about $1.37
per ounce. The only difficulty the silver standard coun-
tries of Asia have is in settling foreign balances in their
trade with gold standard countries, and this is simply a
matter of foreign exchange, which is not a monetary
question but a commercial one, as foreign balances are
never settled in money. When the precious metals are
made use. of in such settlements, as they sometimes are,
they are treated as bullion and not as money; they are
weighed, not counted; the money stamp is utterly
ignored.

SEC. 209. Professor Marshall, in his examination
before the Royal Gold and Silver Commission, in answer
to Question 9,652, said:

" I do not think there is any evidence that bimetallism, that is,
the use of two metals instead of one, in every country in the world
would raise prices all the world over directly; that is, not in gold
and silver countries taken together. Indirectly it might, but directly
I do not think it would, because I think that all the gold and silver
in the world that is not wanted for the arts, for manufactures or for
hoarding, is already acting as currency, and I do not think its effi-
ciency would be increased by the adoption of bimetallism. If
bimetallism caused larger supplies to be raised from the mines, that
would affect prices. If it caused less to be hoarded, that" would
affect prices. If it lead to a silver paper being issued on a thin
reserve of silver, that would inflate prices, but by itself, I do not see
that it would affect prices the world over. If, however, bimetallism
took the particular form of fixing the price of silver, say 20 per cent,
higher than its market value now, I should then expect to see it
raise prices some 10 per cent., perhaps a little less, in gold'countries,
and lower them some 10 per cent, perhaps a little more in silver

116 BIMETALLISM

countries, leaving the average, all the world over, very much as it
was before."

SEC. 210. I confess that I do not see the logic of the
last conclusion. If all the silver money in the world is
now discharging the money function at its nominal value,
as Professor Marshall says it is, and without doubt he is
correct in this, I cannot see how raising the " market
price of silver, say 20 per cent, higher than its market
value now," would, or possibly could, have any effect on
the purchasing power of silver money. If the money
coined from silver bullion passes readily at its nominal
value, it is a matter of no importance to those who use
the money — to those who receive silver money in
exchange for commodities — whether the bullion out of
which the money is coined cost $1.29 per ounce, or
whether it cost $0.50 per ounce. In either case the
money value would be the same, and it is the money
value, and not the bullion value, that acts on prices. In
answer to another question in the same examination Pro-
fessor Marshall said: " I believe that the shillings and
the one-half crowns in circulation have just the same
effect upon prices that they would have if they were a
legal tender. I believe that four one-half crowns affect
prices in precisely the same way that a half sovereign
does."

SEC. 211. At the time the above observation was
made by Professor Marshall the market value of the silver
in the silver half-crown pieces was 20 per cent, below the
nominal values of the coin, and yet the Professor says,
and he says truly, that the half-crown pieces, coined out
of silver that is at a discount of 20 per cent, as measured
by gold, " acton prices in precisely the same way that the
half-sovereign does." If increasing the market value of
the silver 20 per cent, would increase the power of the

INFLATION OF PRICES 117

coin as a factor on prices, then silver would become a
more important factor on prices than gold, because now,
at 20 per cent, below gold, Professor Marshall says it is
an equal factor with the gold sovereign. It is only
necessary to state this proposition to be convinced of its
absurdity. If the " market " price of silver bullion was
increased 20 percent., or 50 per cent., the coin would
continue to act on prices, so long as it discharges the
money function, in precisely the same manner that it does
now; it would act in the same manner and with the same
force that money stamped on gold or on paper would act on
prices. The idea that one kind of money acts on prices
more efficiently than another kind so long as they equally
discharge the money function at their face value and both
are received without objection by the people, is too
absurd for serious consideration.

SEC. 212. The only way that bimetallism could inflate
prices would be by causing more money to be put into
circulation, or by causing less to be hoarded, or by check-
ing the export of bullion to the Orient. It could not
inflate prices by causing more silver bullion to be coined
into money, unless more silver bullion is produced, for
there is comparatively little silver bullion in stock. I know
of no statistician that estimates the silver bullion in stock
at more than fifty million ounces, and it is not usually
estimated at more than twenty-five million ounces, and
many estimates are much lower than twenty-five million
ounces.

SEC. 213. In July, 1895, G. H. Gibson, a prominent
New York stock broker, in an interview published July
8, 1895, in the Chicago Post, in which the amount of
silver bullion in stock was being discussed, said:

" I talked with Sir Hector M. Hay, a member of the firm doing
the largest bullion business in the world. In reply to a direct

118 BIMETALLISM

inquiry as to how much bullion he regarded as existing in the
markets of Europe, he stated his belief that the visible supply of
Europe did not exceed £3,000,000 sterling.

"Sir Charles Freemantle, the Master of the British Mint on
Tower Hill, told me, five years ago, that there was no stock of
silver bullion to speak of in Europe. It came by every steamer and
went away by every steamer. On inquiry of one of the highest
statistical authorities in London the fact was confirmed that despite
the demonetization of silver by all the great nations, the use of
silver in the arts has grown so wonderfully that there is a
ridiculously small supply in the market at any time."

SEC. 214. In June, 1899, I addressed letters of inquiry
to a number of prominent economists and statisticians
requesting them to give me their estimate of the amount
of silver bullion now in stock and for sale in all the
markets of the world. I received answers from most of
them, and their estimates are given in the following
paragraphs:

SEC. 215. Hon. A. J. Warner, who has devoted many
years to the study of the money question, especially to
bimetallism, wrote as follows:

" Some years ago I made an effort to ascertain the amount of
silver bullion then held in stock, but found it very difficult to obtain
information definite enough to enable me to determine even approxi-
mately the supply on hand. I came to the conclusion, however,
that no very large stocks were anywhere carried, and I think the
same is true now, although stocks may have somewhat increased
since 1893, but for the most part silver as fast as produced is sold
for manufacturing purposes or for subsidiary coinage, or is shipped
to India or China."

SEC. 216. Hon. Joseph C. Sibley, a lifelong student
of the money question, writes as follows:

" My estimate from the best figures I have been able to gather
during a few years past is that there are practically no stocks in
Europe. My belief is that no authority today can show in Europe
and America, (outside of our own Government stock), ten million
ounces. I doubt if there is more than one-half that quantity."

INFLATION OF PRICES 119

SEC. 217. Edward Atkinson, a prominent writer and
statistician, and one of the -most radical and uncompromis-
ing gold standard men in the United States, says:

" Sir Hector Hay and Sir Charles Freemantle are both of
authority. Their estimates doubtless refer to the quantity of
bullion on the market. There is little or no bullion held in stock,
and there has been none for a long time."

SEC. 218. Maurice L. Muhleman, of the United States
Sub-Treasury at New York, a man who from his connec-
tion with the Treasury Department must be presumed to
have all the available information on the question, and
who, being an uncompromising gold standard advocate,
could not be suspected of minimizing the silver bullion in
stock, says:

" I am of the opinion that the statements you quote relative to the
available supply of silver bullion in the world, made several years
ago, are substantially correct today. There is no considerable stock
of silver bullion now in the world in the sense that you mean ;
such as, for example, a large stock of any commodity, which could
be 'flung on the market.' Where does it go to? You will find that
in addition to the much larger industrial use of silver, the product is
chiefly sent to the Far East. Thus England, in 1897, exported some
$90,000,000 of silver, and in 1898 over $75,000,000, chiefly to the
East, though Russia took $33,000,000 in 1897 and $10,000,000 in
1898. France has used some in the East (Cochin China) and in
Madagascar also ; and we export five to ten millions to the East."

SEC. 219. Professor Taussig, author of the "Silver
Situation in the United States," and at the present time
professor of Political Economy in Harvard University, an
uncompromising gold standard man, writes as follows:

" I confess, I do not know what may be the stock of silver
bullion available for immediate use. The Director of the Mint
would doubtless have some impression on this matter. But the
question does not seem to me a very material one. The 'flooding '
of the country with silver in case of free coinage, never seemed to
me probable ; while yet it seemed to me certain that we should be

120 BIMETALLISM

very soon, if not immediately on a silver basis, and' that the conse-
quence of being on a silver basis would then work themselves out
by a longer or shorter process."

SEC. 220. Henry G. Miller, author of a valuable book
entitled " Chapters on Silver," and a large contributor to
economic literature for the past twenty-five years, says:

" Seventy-five per cent, of the inhabitants of the earth transact
all their business with silver money and there is nowhere a stock of
silver bullion accumulated and held for sale. All of it goes to silver-
using countries for monetary purposes."

SEC. 221. Geo. H. Shibley, author of a voluminous
and very valuable work on the " Money Question," that
in itself, is conclusive proof that he is an indefatigable
and untiring student and careful investigator not only of
the present conditions but of the history of money, says:

" It is my opinion that there is no considerable amount of silver
bullion for sale, in other words that it is not being kept back for a
higher market but is being offered for sale as rapidly as it comes
from the smelters."

SEC. 222. Charles Gide, author of a standard text
book on Political Economy, a work written in French, but
translated into several languages, and now extensively used
as a text book in many of the leading universities of the
world; at the present time professor of Political Economy
in the University of Montpellier, France, after giving a
carefully prepared statement of the silver money in
France, says: " I do not believe that the quantity in
bars (ingots) is considerable, but I have no figures in this
respect."

SEC. 222a. Hon. Charles A. Towne, Chairman of
the Silver Republican National Committee and one of the
best informed men in the United States on all phases of
the Silver Question, writes as follows:

INFLATION OF PRICES 121

" I have not at hand the data from which I can deduce a
reasonably correct conclusion in regard to the 'total amount of silver
bullion now for sale In all the markets of the world.' My judg-
ment, however, is that there practically is no stock on hand at all.
I have been in the habit of challenging our opponents to show any
stock of silver in existence, of any serious proportion, with which
our mints could be ' flooded ' in case of the re-establishment of
bimetallism, and nobody has undertaken to point out any such
hoard."

SEC. 223. Alfred Marshall, author of " The Principles
of Economics," one of the best publications on Economics
ever published; and at the present time Professor of
Political Economy in the University of Cambridge,
England, writes as follows:

" I am sorry to say that I am not an authority on the subject on
which you write. I understand that bullion dealers believe that the
free stock of silver in England is seldom considerable. One of them
once told me that there was nothing to be gained, and something to
be lost, by holding any considerable stock, and so far as a complete
outsider can form an opinion the argument seemed reasonable
to me."

SEC. 224. Lord Aldenham, one of the best informed
men in Europe on all phases of the money question, in
his examination before the Indian Currency Committee,
March 16, 1899, in answer to question 12,882, said:

" You must remember this: All the silver that is produced is
used. There are no stocks anywhere."

SEC. 225. Before writing the letters to which the fore-
going paragraphs are replies, I made a careful examination
of all available statistics, and arrived at the conclusion that
there couid not possibly be in all the markets of the
world to exceed fifty million ounces of silver bullion, and
in all probability there was not to exceed one-half of that
amount. If, however, there is 50,000,000 ounces and it
should all be coined into money at the ratio of 16 to 1, or at

122 BIMETALLISM

15 ^ to 1, or even at the Asiatic ratio of 15 to 1, it
would make less than five cents per capita for the inhabi-
tants of the earth, and such an addition to the world's
volume of money certainly would not inflate prices.

SEC. 226. In Chapter XVIII , entitled, " Bimetallism in
the United States," reasons are given and statistics quoted
which I think conclusively prove that the amount of silver
bullion now for sale is very small, to which chapter the
reader is referred. In estimating the amount of silver
bullion for sale, the bullion held by the United States and
any that may be held by other governments is excluded.
Such bullion is not on the market and is not for sale.
There is certainly no danger of the inflation of prices from
the coinage of the bullion now in stock, and there is no
probability of there being any future production of silver
and gold more than sufficient to keep pace with increasing
population and increasing demand for money. It will be
seen from the foregoing answers that some of my corres-
pondents assume that most of the silver bullion produced
since 1893 has been consumed in the arts or shipped to
the Orient. In this, however, they are mistaken. The
consumption in the arts and for mechanical purposes, and
the exports to the Orient, are but little, if any, greater in
proportion to the production than formerly. It will be
seen by reference to the 1898 Annual Report of the Direc-
tor of the Mint, page 266, that the world's coinage of silver
money has been constantly and rapidly increasing since
1893. The world's coinage of silver in 1896 was $159,-
539,927, of which $106,400,408 was coined in Europe and
America, and $53,139,519 was coined in the rest of the
world. The coinage of silver in 1897 was $167,760,297,
of which $98,444,204 was coined in Europe and America,
and $69,316,093 was coined in the rest of the world. In
1896 the European coinage was $56,752,279, and in 1897

INFLATION OF PRICES 123

it was $56,841,157. The above facts, shown in the
Report of the Director of the Mint for 1898, contradict
the assumption that the silver bullion now being produced
is being consumed in the arts.

SEC. 227. That the demonetization of silver has been
an important factor in the depression of prices is unques-
tionably true, but it is not because the silver that
remained in circulation ceased to act on prices, nor
because it acted with less efficiency than formerly, but
because silver being no longer primary money or money
of final redemption, an abnormal demand was created for
gold for that purpose, which caused large amounts of gold
to be withdrawn from circulation and hoarded in reserves.
More than $1,000,000,000 in gold coin is now held out of
circulation in the war chests of a few of the leading
nations of Europe in addition to the amount held in
reserve in 1873. This reserve while so held out of cir-
culation does not and cannot act on prices, and for all
practical purposes it might as well be at the bottom of
the ocean as to be where it is, so far as being a price-
regulating factor is concerned.

SEC. 228. Free coinage of silver would allay, to some
extent at least, the fear of a money famine, and would
probably cause some of the hoarded gold to be released
and put into circulation. Again, if silver had free access
to the mint at the old ratio, its production would be
stimulated, more silver would be produced and added to
the money of the world, and this new money would tend
to stimulate prices, and these two causes acting together
— the gold released from hoards, and the new silver
produced — would in all probability check a further fall in
prices and possibly give them a slight upward tendency.
But as we have already seen (See Chapter VI. on Con-
sumption of the Precious Metals in the Arts and Manu-

124 BIMETALLISM

factures), a very large per cent, of the annual production
of gold is being consumed in the arts and manufactures,
and hereafter the world must depend very largely upon
silver for its supply of metallic money.

SEC. 229. There is no force in the objection to
bimetallism on the ground that it would inflate prices.
Bimetallism would not and could not inflate prices. The
most it could do would be to check a further fall and
possibly give prices a slight upward tendency. It would
be impossible, with any yield from the mines, at all
probable, to restore the prices of 1873. The men who
make these objections, if they have investigated the facts,
must know that there is no danger of inflation from
bimetallism. The entire production of both of the
precious metals, if not an ounce of either was consumed
for non-monetary purposes, is not sufficient to keep pace
with the increasing money demand of the world.

CHAPTER XVI.

PARITY OF EXCHANGE.

SEC. 230. Can a parity of exchange be maintained
between gold-using and silver- or paper-using countries?
I unhesitatingly answer, yes; that it is not necessary to
have gold in any particular country in order to maintain
gold prices and a parity of exchange in such country,
but only necessary to limit the volume of money so as to
bring the total sum of money available for use, in such
country, within the amount of its distributive share of the
world's money as measured by its population and busi-
ness; and that this fact is very conclusively shown by
the report of the Indian Currency Commission of 1893.
(See page 35, sec. 93-96, Indian Currency Commission
Report).

It is there shown that a substantial parity of exchange
has been maintained under the following conditions:

" First — With little or no gold, as in Scandinavia, Holland and
Canada ;

" Second— Without a mint or gold coinage, as in Canada and the
Dutch East Indies ;

" Third—With a circulation consisting partly of gold, partly of
overvalued and inconvertible silver which is legal tender to an
unlimited amount, as in France and other countries of the Latin
Union, in the United States, and also in Germany, though there
the proportion of overvalued silver is more limited, the mints in all
these countries being freely open to gold, but not to silver, and in
some of them silver coinage having ceased ;

126 BIMETALLISM

" Fourth— Witn a system under which the banks part with
gold freely for export, as in Holland, or refuse it for export, as in
France.

" Fifth— With mints closed against the private coinage of both
silver and gold, and with a currency of inconvertible paper as has
been temporarily the case in Austria.

" Sixth — With a circulation based on gold, but consisting of token
silver, which, however, is legal tender to an unlimited extent, as in
the West Indies. * *

" It would thus appear," is the conclusion of the Commission,
" that it has been found possible to introduce a gold standard with-
out a gold circulation ; without a large stock of gold currency ; and
even without legal convertibility of an existing silver currency
into gold."

SEC. 231. Professor Nicholson, commenting upon the
above facts found by the Commission, and the conclusion
deduced therefrom, in his " Money and Monetary Prob-
lems," page 415, says:

" It is to be regretted that the Commission did not emphasize the
fact that in every one of these cases the same general principle is
exemplified, the principle, namely, of limitation— first definitely
established by Ricardo.— ANY KIND OF CURRENCY CAN BE
MAINTAINED AT AN ARTIFICIAL VALUE, PROVIDED ONLY THAT
IT IS STRICTLY LIMITED, AND THE DEPRECIATION (IF ANY)
WILL DEPEND UPON THE EXCESS OF ITS QUANTITY, although,
of course, the variation is not one of simple proportion."

SEC. 232. The explanation of this is very simple.
The essential element of money is limitation, and where
the money, no matter of what material, is kept within a
limit that equals the distributive share of the world's
money of the nation so issuing it, its value will remain at
par with gold; and by limiting the quantity, if made an
exclusive legal tender in such country, it can be forced to
any desired premium in gold. It was upon this principle
that the inconvertible paper milreis of Brazil commanded
a premium of five per cent, in foreign gold coin and upon

PARITY OF EXCHANGE 127

which the numerous instances cited by Ricardo also
depend. It was upon this principle and by the force of
this economic law that the inconvertible notes of the Bank
of England commanded a premium in gold coin during the
years 1798, 1799 and 1800. (See Encyclopedia Brittanica,
Ninth Edition, Article Banking, Vol. 3, page 320.) It will
also be seen from the above historical facts that there is
no force in the contention so persistently urged by certain
gold standard advocates, that to maintain a parity of
exchange between gold-using countries and silver-using
countries, or even to maintain bimetallism, it is necessary
to exchange gold for silver, or silver for gold, on the
demand or request of any person or of any government.

CHAPTER XVII.

DEMONETIZATION.

SEC. 233. In the consideration of the question of the
demonetization of silver, we should always keep in mind
the motive that actuates the monometallist. The war
being waged against the white metal is not because of the
depreciation of silver, or because there is any difficulty
in maintaining a parity between the two metals, nor is it
because silver is not a desirable material upon which to
place the money stamp, but because, and only because,
the great capitalists of the world, the men who hold
stocks, bonds, mortgages and other evidences of indebted-
ness to the amount of more than $200,000,000,000, the
men who have fixed incomes, who live upon the wealth
produced by others, desire to make money dear and com-
modities cheap; because they want to crowd more wheat,
more pork, more cotton, more days' work into the dollar.
It makes no difference to them whether the money
destroyed is gold or silver, but they insist that the use of
one of the precious metals, as a money metal, must be
discontinued, and the one which for the time being
promises to be the most abundant is the one they make
war upon.

SEC. 234. Soon after the gold discoveries in California
and Australia, and when it was generally understood that
the amount of new gold being thrown into circulation
would necesarily cause a rise in the general level of

DEMONETIZATION 129

prices, there was a concerted action on the part and in
behalf of the money kings of the world to demonetize
gold. This movement, instigated by the great money
syndicates of the world, was advocated by such able
economists as De Quincey and Chevalier, and under
their influence and advice gold was, in 1857, demonetized
in Germany, Austria, Holland, and in some other States,
and the demonetization of gold would in all probability
have become general had it not been for the determined
opposition of France, at that time the leading coining
nation in the world. Having failed to secure the demone-
tization of gold, and the production of silver having
largely increased some twelve or fifteen years later, and
when it seemed probable that silver would be the most
abundant of the two metals, the opposition to gold was
abandoned, and the forces of the allied money kings of
the world were directed against silver. The same or at
least similar influences that secured the support of De
Quincey and Chevalier to advocate the demonetization of
gold in 1857, were able to secure the ardent support of
such pseudo-economists as Wells, Atkinson, Laughlin,
Giffen, McLeod and some others, none of whom, however,
appear to be able to distinguish between money and a
piece of metal, or as Senator Jones says:

"Dimly seeing the 'kindly light' and fearing to follow, are
content to argue in a circle and grope in darkness compared with
which midnight may be called noon. Students of books rather than of
men— of theories rather than of life— struck with awe at the power
of wealth and the glamour of privileges — they either pause at the
very threshold of discovery, and retrace their steps, or seeing the
truth prefer to appear ignorant lest they give offense to the
mighty."

SEC. 235. The Act of 1873 which struck the silver
dollar from the list of coins in the United States, com-

9

130 BIMETALLISM

monly referred to as the Demonetization Act, did not
deprive the silver dollars already coined of their legal
tender property, but only prohibited their further coinage.
Those already in existence were not actually demone-
tized until the following year on the compilation of the
General Statutes by which their full legal tender property
was destroyed and they were allowed to be used as a
legal tender only in the payment of debts, like the
subsidiary silver coins, in sums of five dollars or under.

SEC. 236. In 1878 the legal tender property of the
silver dollar was partially restored — that is, it was made
a legal tender in the payment of debt, "except where
otherwise expressly stipulated in the contract."

SEC. 237. This proviso permits any person who
chooses so to do to discriminate against silver in contracts
for the payment of money. While the act of 1878 remo-
netized silver so far as payments to and by the Govern-
ment were concerned, made silver money a legal tender
when not otherwise specified in the contract, and provided
for the coinage of a certain limited amount of silver each
month on Government account from silver bullion
purchased by the Government at its market value, it
denied it access to the mints on terms of equality with
gold; it permitted banking corporations, trusts, syndicates
and individuals, in any and all contracts executed to
them for the payment of money, to stipulate in such con-
tracts that payment should not be made in silver, thus
discriminating against silver money issued, or to be
issued, by the Government. It delegated to corpora-
tions and to individuals, so far as they were concerned,
the power to demonetize silver money. And every Sec-
retary of the Treasury since the passage of this law has
arbitrarily surrendered to the creditor the option, expressly
reserved to the Government, of paying in silver money,

DEMONETIZATION 131

and in all cases when gold has been demanded by the
creditor gold has been paid. Gold has been paid when
the treasury was overflowing with silver, and when
interest-bearing bonds had to be sold to obtain gold with
which to make such payments or to maintain the gold
reserve. With such a law, so administered, the wonder
is not that silver bullion has fallen in value as measured
by gold, but that it has commanded as high a price as it
has commanded or that silver money has circulated as
money at all.

SEC. 238. It has been charged that these Acts, the
Act of 1873 and of 1874, were corruptly passed through
both houses of Congress. Whether British gold was
used to corrupt certain members of Congress is not, and
probably never will be, positively known. But certain
it is that not to exceed half a dozen members of Congress
knew at the time of the passage of the Act of 1873, that
the silver dollar was stricken from the list of coins, and
its further coinage prohibited. And those who did know
it said nothing about it in public. Certain it is that
when President Grant signed it he knew nothing about
it. Certain it is that the people had never petitioned
Congress for any such legislation, and did not know that
there had been any such until nearly two years after the
passage of the act.

SEC. 239. The act striking down the silver dollar and
prohibiting its further coinage was the most important and
far-reaching in its consequences of any act ever passed
by Congress, and yet no paper published anywhere in
the United States, at or near the time of its passage, con-
tains any reference to it whatever.

SEC. 240. In proof of the fact that President Grant
did not know that the act of 1873 prevented the coinage
of the silver dollar, I quote a paragraph from a letter writ-

132 BIMETALLISM

ten by the President, October 3, 1873, to Mr. Cowdry

in which he says:

" I wonder that silver is not already coming into the mint to
supply the deficiency in the circulating medium. Experience has
proved that it takes about $40,000,000 of fractional currency to
make the small change necessary for the transaction of the business
of the country. Silver will gradually take the place of this currency
and further, will become the standard of value which will be hoarded
in a small way. I estimate that this will consume from $200,000,000
to $300,000,000 of this species of our circulating medium. I confess
to a desire to see a limited hoarding of money. BUT I WANT TO
SEE A HOARDING OF SOMETHING THAT IS A STANDARD OF
VALUE THE WORLD OVER. SILVER IS THIS. Our mines are
now producing almost unlimited amounts of silver, and it is becom-
ing a question, 'What shall we do with it?' I suggest here a
solution which will answer for some years, to put it in circulation,
keeping it there until it is fixed, and then we will find other
markets."

SEC. 241. The letter from which the above quotation
is taken was written by President Grant nearly eight
months after he had approved the act that struck the
standard silver dollar from the list of coins and had made
all silver coins thereafter coined in the United States
a limited tender for five dollars only. The fact that
President Grant in October, 1873, said: " I wonder that
silver is not already coming into the mint to supply the
deficiency in the circulating medium," is very convincing
evidence that he did not know that the act of February
12, 1873, had stricken the standard dollar, the only full
tender silver coin we had, — from the list of coins, — had
denied it access to the mint and had degraded silver gener-
ally to a limited tender money. And the further fact that
after estimating that from $200,000,000 to $300,000,000
would be hoarded by the people he should write: " / confess
to a desire to see a limited hoarding of money. But I want
to see a hoarding of something that is a standard of value

DEMONETIZATION 133

the world over. Silver is this," is conclusive evidence that
he did not know that silver had been stricken down,
degraded, made subsidiary to gold and its coinage prohib-
ited by law.

SEC. 242. Professor Walker, one of the delegates from
the United States to the 1878 International Monetary
Conference, stated that the people of the United States
generally knew nothing of the legislation of 1873 that
struck the silver dollar from the list of coins, and prohibited
its further coinage, until long after the passage of the act,
that it was unknown even to men specially occupied with
financial and monetary subjects. He himself, though he
had at the time been lecturing on Money, and occupied a
chair of political economy, was not aware of what was
being done, and he presumed the great majority of his
fellow citizens were equally ignorant. (See Report of
Monetary Conference, 1878, page 25).

SEC. 243. In further proof of the fact that the act demo-
netizing silver was surreptitiously passed through Con-
gress, I quote from page 165 and following pages of " Our
Money Wars," by Samuel Leavitt, a valuable book pub-
lished in 1895. Mr. Leavitt says:

"John Sherman seeks to create the impression, [and if Mr.
Leavitt was writing today he might add the name of John Jay
Knox] that the demonetization of silver was well understood by the
Senators and Representatives at the time they voted for it, he
justifies his vote for it, and yet at the same time seems quite anxious
to divide the responsibility with others."

SEC. 244. " Hon. W. D. Kelley, Chairman of the Coinage
Committee of the House, did not know that the bill demonetized
silver, though he reported the bill. Garfield did not know it;
Elaine did not know it. They were both members of the House.
Conkling did not know it. So these gentlemen asserted, and they
were certainly as truthful as Sherman.

SEC. 245. " Sherman in his opening speech of the late campaign
delivered at Paulding, Ohio, August 27, 1891, in regard to the bill

134 BIMETALLISM

of 1873 demonetizing silver, said: ' The Act of 1873 was not an act
of the party then in power but it was an act of all parties. It was
voted for by Democrats and Republicans alike, after full consider-
ation for three years in Congress. It was voted for by every
Representative from the silver States.'

"Now we want to prove Sherman a prevaricator. From the
history of the Act of 1873, and the act of 1878, we copy the following:
Judge Kelley of Pennsylvania, was Chairman of the Committee on
Coinage, Weights and Measures in 1872, when the bill originally
passed the House. This is what he said on the floor of the House,
March 9, 1878:

" ' In connection with the charge that I advocated the bill which
demonetized the standard silver dollar, I say that, though the
Chairman of the Committee on Coinage, I was as ignorant of the
fact that it would demonetize the silver dollar, or of its dropping
the silver dollar from our system of coins as were those distin-
guished Senators — Messrs. Blaine and Voorhees, who were then
members of the House and each of whom a few days since, inter-
rogated the other: ' Did you know it was dropped when the bill
was passed? ' ' No,' said Mr. Blaine, ' did you? ' ' No,' said Mr.
Voorhees, ' I do not think there were three members in the House
that knew it. I doubt whether Mr. Hooper, who in my absence
from the Committee on Coinage, and attendance on the Committee
on Ways and Means, managed the bill, knew it. I say this in
justice to him.' (Congressional Record, Volume 7, Part 2, Forty-
fifth Congress, second session, page 1605).

SEC. 246. " Mr. Holman in a speech delivered in the House of
Representatives, July 13, 1876, said: ' I have before me the record
of the proceedings of this House on the passage of that measure, a
record which no man can read without being convinced that the
measure and the method of its passage through the House was a
'colossal swindle.' I assert that the measure never had the sanc-
tion of this House ,and it did not possess the moral force of law.'
(Congressional Record, Volume 4, Part 6, Forty-fourth Congress,
first session, Appendix, page 193).

" Again on August 5, 1876, he said: ' The original bill was sim-
ply a bill to organize a bureau of mines and coinage. The bill
which finally passed the House and ultimately became a law, was
certainly not read in this House. * * It was never considered
before the House as it was passed. Up to the time the bill came

DEMONETIZATION 135

before this House for final passage, the measure had simply been
one to establish a bureau of mines; I believe I use the term correctly
now. It came from the Committee on Coinage, Weights and
Measures. The substitute which finally became a law, was never
read, and it is subject to the charge made against it by the gentle-
man from Missouri, (Mr. Bland), that it was passed by the House
without a knowledge of its provisions, especially upon that of coin-
age. I, myself, asked the question of Mr. Hooper, who stood near
where I am now standing, whether it changed the law in regard to
coinage. And the answer of Mr. Hooper certainly left the impres-
sion upon the whole House that the subject of the coinage was not
affected by that bill. (Congressional Record, Vol. 4, Part 6, Forty-
fourth Congress, first session, page S237).

SEC. 247. " General Garfield, in a speech made at Springfield,
Ohio, during the fall of 1877, said: ' Perhaps I ought to be ashamed to
say so, but it is the truth to say that, at that time being Chairman of
the Committee on Appropriations, and having my hands overfull
during all that time with work, I never read the bill. I took it upon
the faith of a prominent Democrat and a prominent Republican, and
I do not know that I voted at all. There was no call for the yeas
and nays, and nobody opposed that bill that I know of. It was put
through as dozens of bills are, as my friend and I know, in Congress
on the faith of the report of the chairman of the committee; there-
fore, I tell you, because it is the truth, that I have no knowledge
about it.'

SEC. 248. " Senator Allison, on February 15, 1878, when the bill
(H. R. 1093) to authorize the free coinage of the silver dollar was
under consideration, said: ' But when the secret history of this bill
of 1873 comes to be told it will disclose the fact that the House of Rep-
resentatives intended to coin both gold and silver, and intended to
place both metals upon the French relation instead of on our own,
which was the true scientific position with reference to this subject
in 1873, but that the bill was afterwards DOCTORED, if I must use
the term, and I use it in no offensive sense, of course.'

" Mr. Sargent interrupted him and asked him what he meant by
the term 'doctored.'

" Mr. Allison said: ' I said I used the word in no offensive sense.
It was changed after discussion, and the dollar of 420 grains was
substituted for it.' (Congressional Record, Vol. 7, page 2, Forty-
fifth Congress, second session, page 1058).

136 BIMETALLISM

SEC. 249. "On February 15, 1878, during the consideration of
the bill above referred to, the following colloquy between Senator
Elaine and Senator Voorhees took place:

" Mr. Voorhees — ' I want to ask my friend from Maine, who I am
glad to designate in that way, whether I may call him as one more
witness to the fact that it was not generally known whether silver
was demonetized. Did he know, as Speaker of the House, presiding
at that time, that the silver dollar was demonetized in the bill to
which he alluded?'

" Mr. Blaine — ' I did not know anything that was in the bill at
all. As I have before said, little was known or cared on the subject.
(Laughter.) And now I should like to exchange questions with the
Senator from Indiana, who was then on the floor, and whose busi-
ness it was far more than mine to know, because by the designation
of the House I was to put questions; the Senator from Indiana then
on the floor of the House, with his power as a debater, was to
unfold them to the House. Did he know?'

SEC. 250. " Mr. Voorhees—' I very frankly say that I did not.'
(Ibid., page 1063).

SEC. 251. " Senator Beck in a speech made in the Senate Janu-
ary 10, 1878, said: ' It (the bill demonetizing silver) never was
understood by either House of Congress. I say that with full
knowledge of the facts. No newspaper reporter— and they are the
most vigilant men I ever saw in obtaining information — discovered
that it had been done.' (Congressional Record, Volume 7, Part 1,
Forty-fifth Congress, second session, page 260).

SEC. 252. " Mr. Thurman said: ' I cannot say what took place
in the House, but I know, when the bill was pending in the Senate,
we thought it was simply a bill to reform the mint, regulate coinage
and fix up one thing and another; and there was not a single man
in the Senate, I think, unless a member of the committee from
which the bill came, who had the slightest idea that it was even a
squint toward demonetization.'" (See " Our Money Wars," pp.
164-168).

SEC. 253. In view of all these facts it cannot be possi-
ble that it was generally known either in or out of Con-
gress, at the time of the passage of the act of 1873 that

DEMONETIZATION 137

the silver dollar was by that act stricken from the list of
coins and its further coinage prohibited; and any man, no
matter what may have been his opportunities for knowing,
and no matter what may have been his official position or
his connection with the Treasury Department, or with
any other department of the Government, who now
claims that the full import of that act was understood and
discussed in both branches of Congress, and that it was
the intention of those voting for the act of 1873 to degrade
silver to the position of partial legal tender money, and to
prohibit the further coinage of the silver dollar, wilfully
and corruptly misrepresents the facts. It is not possible
for him to be mistaken about it. I am well aware that
this is very strong language to apply to men who have
held prominent positions in the councils of the nation; but
it has been the misfortune of many nations to have been
betrayed by those who have been trusted by the people
with important positions; the people cannot always distin-
guish between the worthy and the unworthy in the
selection of officers. Even one of the twelve disciples
chosen by our Saviour proved to be a devil, and it must
be expected that occasionally a Judas will insinuate him-
self into the councils of a nation and not only betray his
trust, but also make himself an apologist for the wrong
deeds of his co-conspirators.

SEC. 254. Senator Jones, in a speech before the Inter-
national Monetary Conference, 1892, page 262, said:

" In the demonetization of silver, a wrong unexampled in the
history of time was committed upon civilization. One-half of the
metallic money of the world was at a blow removed from accessi-
bility to debtors. Debts, enormous in number and amount, had
been contracted under conditions which gave the debtors a right to
draw for means of payment on all of the gold and silver mines of
the world. Thenceforth by legislative interference, they were

138 BIMETALLISM

deprived of their option, and were compelled to pay in gold alone,
which was becoming yearly less and less capable of sustaining the
industry of the world."

He also said (see page 295): "The taking from either or any
portion of either [of the metals], the debt-paying function, without
furnishing some equally well adapted thing to perform that function
in its stead, was a step of the most baneful import to society. IF
TAKEN WITHOUT FULL APPRECIATION OF THE RESULTS THAT
WERE TO FOLLOW, IT WAS A PIECE OF DELIRIOUS FOLLY.
IF WITH FULL CONSCIOUSNESS OF THE CONSEQUENCES, IT
WAS — ON THE PART OF THE CREDITOR CLASSES— NOTHING
LESS THAN AN ACT OF TREASON AGAINST THE HUMAN RACE."

SEC. 255. The history of the world has already
established beyond the possibility of a doubt that a
shrinking volume of money and its inevitable accompani-
ment, falling prices, blocks the wheels of industry, dries
up the springs of enterprise, lessens production, relegates
willing workers to enforced idleness and plunges them
into debt — which is but another name for slavery —
breeds pestilence, fosters crime, and fills our jails, alms-
houses, and lunatic asylums. Senator Jones does not
use too strong language when he characterizes the
demonetization of silver as "An act of treason against
the human race."

SEC. 256. Professor Walker, in an address delivered
before the International Monetary Conference of 1878,
(see pp. 74-78), said:

" We are not, therefore, asking this body to decree a reversal of
a law of nature in asking the consideration of the expediency of
arresting, and, so far as practicable, reversing the movement for the
demonetization of silver. So far as that movement has proceeded,
it has been wholly a work of man's accomplishing as it was of
man's devising. The action of Germany in 1871 was wholly
gratuitous and of choice, not compelled, or even suggested, by any
commercial, industrial, financial, or fiscal stress or exigency.

DEMONETIZATION 139

" That action involving important changes in the monetary
policy of the Scandinavian kingdoms, and of the Latin Union, was,
as we conceive, taken under bad advice, with partial or mistaken
views of the proper relations of silver to the trade of the civilized
nations, in their present state of development, and with little or no
consideration of the broader question, as to the effects upon the
production of wealth which would be wrought by so great a
diminution of the Money supply of the world.

" As the Conference of 1867, wholly absorbed in the consideration
of the means of securing International Coinage, did incontestibly
exert a powerful influence in initiating the movement for demone-
tizing Silver, it remains for the Conference of 1878, with a more
sober judgment and a larger view of human interests, instructed as
the nations have been by the bitter experience of the past few
years, to put forth its hand to stay the progress of that demone-
tization which has already brought such mischiefs upon trade and
the production of wealth. * * A diminution of the Money
supply is one of the gravest evils which can menace mankind.

" The mischiefs of a contracting circulation have, twice at least,
in the course of events, befallen Europe as the result of the
exhaustion of the mines of the precious metals, or the interruption
of the mining industry by barbarian invasion or civil convulsion.
IT HAS REMAINED FOR THIS GENERATION AND THIS DECADE
TO SEE THESE MISCHIEFS BROUGHT UPON EUROPE BY THE
DELIBERATE ACTS OF GOVERNMENT UNDER THE ADVICE OF
POLITICAL ECONOMISTS.

" Whether the Money-supply of Europe and America would be
reduced by the completion of the movement initiated in 1871, to the
extent of 40, or 30, or of only 20 per cent., the consequences could
not but be most disastrous.

" SUFFOCATION, STRANGULATION, ARE WORDS HARDLY TOO
STRONG TO EXPRESS THE AGONY OF THE INDUSTRIAL BODY
WHEN EMBRACED IN THE FATAL COILS OF A CONTRACTING
MONEY-SUPPLY !

" Against so great a wrong to civilization and to the hopes of
mankind, the representatives of the United States, here present,
raise their earnest protest and warning. This is our real interest in
the silver question. This it is which brings us here."

140 BIMETALLISM

SEC. 257. Baron Rothschild, in speaking of the evil
effect that would ensue if demonetization became general,
said:

" The simultaneous employment of the two metals is satisfactory
and gives rise to no complaint. Whether gold or silver dominates
for the time being, it is always true that the two metals concur
together in forming the monetary circulation of the world, and it is
the general mass of the two metals combined which serves as the
measure of value of things. The suppression of silver would
amount to a veritable destruction of values without any com-
pensation." (Quoted from Senator Jones' May (1890) speech,
page 18).

SEC. 258. Speaking of the proposition to demonetize
silver, Senator Dumas, in the Senate of France, March
28, 1878, said:

"Those who approach these questions for the first time decide
them at once. Those who study them with care hesitate. Those
who are obliged practically to decide, doubt and stop overwhelmed
with the weight of the enormous responsibility." (Id. p. 17).

SEC. 259. Sir Guilford L. Molesworth, Delegate
from British India, to the International Monetary Con-
ference of 1892, in a speech delivered before the Con-
ference and reported in its proceedings on page 138, said:

" Our predecessors in the Paris Monetary Conferences of 1878
and 1881 were almost unanimous in the opinion that silver must be
rehabilitated. They only disagreed on the manner of rehabilitation.
Some were of the opinion that matters would right themselves,
whilst others considered that the remedy could only come by
re-establishing the link that had existed between gold and silver
prior to 1873.

" The opinion of the latter was undoubtedly correct. Matters
have gone on from bad to worse, and now, we are confronted by
the fact that Mr. de Rothschild, the most renowned financier of the
world, tells us that if this Conference were to break up without
arriving at any definite result there would be a depreciation in the
value of silver out of which a monetary panic would ensue, the far-
spreading effects of which it would be frightful to contemplate.

DEMONETIZATION 141

" Now this state of things was clearly predicted by Ernest Seyd
in 1871, when the severence of the link between gold and silver was
first contemplated. His prediction has been so remarkably fulfilled
that I must quote his words:

' It is a great mistake,' said he, 'to suppose that the adoption of the gold valuation
by other States besides England will be beneficial. It will only lead to the destruction
of the monetary equilibrium hitherto existing, and cause a fall in the value of silver,
from which England's trade and the Indian silver valuation will suffer more than all
other interests, grievous as the general decline of prosperity all over the world will
be. The strong doctrinarianism existing in England as regards the gold valuation is
so blind that when the time of depression sets in there will be this special feature;
the economical authorities of the country will refuse to listen to the cause here
foreshadowed, every possible attempt will be made to prove that the decline of
commerce is due to all sorts of causes and irreconcilable matters; the workman and
his strikes will be the first convenient target, then speculation and over-trading will
have their turn. * * Many other allegations will be made, totally irrelevant
to the real issue, but satisfactory to the moralizing tendency of financial writers.' "

SEC. 260. Senator Jones, in his October (1893)
speech, page 53, said:

'• The question is not whether we shall have a white or a yellow
metal upon which to put the stamp of the Government; the
question really is, shall we have a quantity of money that will
maintain justice between debtor and creditor in the matter of
deferred payments — a feature not only of great, but of surpassing
importance? Mr. President, justice is, in my estimation, much
more sacred than gold. When it is said that we should have a
dollar that will be at parity with gold, I reply that we might better
have a dollar that will be at a parity with the products of the labor
of our people — at a parity with a bushel of wheat and with a pound
of cotton. What I wish to see in this country is a dollar that will
be, and will stay at a parity with justice. Gold is at a parity with
nothing, but, on the contrary, is at a disparity with everything."

CHAPTER XVIII.

BIMETALLISM IN THE UNITED STATES.

SEC. 261. Can the United States coin silver into full
.egal tender money at the ratio of 16 to 1 without an
international agreement? There never was an interna-
tional agreement for the coinage of the precious metals at
a certain fixed ratio, and yet prior to 1873 no difficulty
was experienced in maintaining the relative values of the
two metals, at or near the coinage ratio of the principal coin-
ing nations. Since 1873 a great divergence between the
relative values of the two metals has taken place. What
has caused this divergence?

SEC. 262. That it has not been caused by a difference
in the relative amounts of gold and silver bullion produced
from the mines since 1873 becomes apparent by reference
to the official reports of the production of the precious
metals. (See report Secretary of the Treasury, 1897,
page 229). The value of the gold produced 1873 to
1896, both inclusive, (value of both metals computed at
the ratio of 16 to 1), is $2,929,688,100, and the value of
the silver produced during the same period is $3,179,-
345,600. It will be seen from this official report that the
value of the world's output of silver during this period is
but very little more than that of the gold.

SEC. 263. It also appears from the same report that the
production from 1860-1872 was, gold $1,628,252,000, and
silver, $708,521,000 — less than one-half as much in

BIMETALLISM IN THE UNITED STATES 143

value of silver as of gold, and yet the metals were held
comparatively steady at the French coinage ratio of
15 j£ to 1. From 1493 to 1850, a period of 357 years,
the value of the goid produced was $3,314,550,000, and
of the silver, $7,358,450,000, more than twice as much
in value of silver as of gold, and yet the relative values
of the two metals always kept within the limits fixed
by the coinage or mint regulations of the principal coin-
ing nations of the world. Over long periods of time it
has frequently happened that double or more than double
in value of first one and then the other of the metals has
been produced, sometimes, in fact, for many years
together the production of one of the metals almost
entirely ceased, yet these enormous fluctuations in the
relative production of the metals had no effect on their
relative value for monetary purposes. Since 1873 the
value of the gold and silver produced — measured by the
coinage ratio — has been more nearly equal than at any
other time, and yet the change in their relative com-
mercial value in the twenty-five years since 1873 has
been five-fold greater than in the 380 years preceding
1873. It therefore follows that it could not have been
the slight excess in the production of silver since 1873
that has caused the great divergence in the values of
gold and silver bullion.

SEC. 264. In view of these facts there can be no
question that the controlling influence holding the metals
together ever since their use as money metals was the
ratio at which they were permitted to be coined into
money. They were chained together by the mint ratio
of the leading coining nations, by nations that were able
to receive and did receive, coin into money, and float as
money, all the silver bullion presented at their mints for
coinage purposes. So long as this link establishing a

144 BIMETALLISM

legal ratio between the metals for coinage purposes was
maintained, and equal monetary power was conferred on
the coins of both, it was impossible for the metals to fall
apart, but when the link was broken, as it was in 1873,
they fell apart, and they fell apart because the link was
broken, and for no other reason.

SEC. 265. In 1873 and since that time several import-
ant nations have ceased to coin silver into money as they
had previously done. Silver has been denied access to
their mints on terms of equality with gold; the unlimited
demand for silver, at a fixed ratio with gold ceased to
exist; in other words, silver, instead of being a money
metal, with unlimited mint privileges and full legal tender
power, was degraded to the position of a commodity, and
its value became subject to the law of supply and demand
like any other commodity, while to gold was accorded
unlimited mint privileges, unlimited demand at a fixed
price — measured in gold — and unlimited legal tender
power.

SEC. 266. This discrimination against silver and in
favor of gold has lessened the demand for silver and
increased the demand for gold; the lessened demand for
silver has caused its value to fall somewhat in the
market, while the increased demand for gold has caused
its value to appreciate.

SEC. 267. Under the mint laws as modified in and
since 1873 gold has become the only money of full legal
tender power. This fact has caused a scramble for gold
in several of the great nations for national reserves, and,
as it was well known that gold was rapidly appreciating in
value, many of the great banking corporations have elected
to hold their reserves in gold. We have already seen in
another Section (see Sec. 160) that more than one thou-
sand million dollars in gold coin is now held in war chests

BIMETALLISM IN THE UNITED STATES 145

and in national and bank reserves, in excess of that held
in 1873. This abnormal demand for gold, resulting solely
from legislation, has nearly doubled the value or purchas-
ing power of gold within the past twenty-five years, and
from this enormous appreciation of gold and from a slight
depreciation of silver the commercial ratio between the
metals has changed from 15^ to 1 as it was in 1873 to
about 34 to 1 in 1899.

SEC. 268. Prior to 1873 both gold and silver had free
access to the mints as money metals of unlimited tender
power at ratios in most countries ranging from 15 to 1 to
16 to 1. Such coinage privileges accorded to both metals
held their value comparatively steady at the mint price.
From the time of the adoption of individual, or free, coin-
age in the principal States of Europe and America until
1873, when free coinage was denied to silver, there was
no such thing as a "market value " for either gold or
silver bullion.

SEC. 269. Between 1666 and 1873 the value of bullion
of either of the metals was the result of competition
between the mints of the principal coining nations. The
price never rose above the highest price paid for it at
any important mint unless influenced by pressing local
demands for other than monetary purposes, and then
only slightly above, and for a short time only, and never
fell below the price paid for it at any important mint to
exceed an amount equal to the incidental expenses, mint
charges and cost of transportation to the coining mint.
In other words: " Nobody gave more nor less in one
metal for the other than the mints gave, and the mints
gave whatever the law directed. The so-called ' market
value ' of this period was simply what may be termed an
international mint ratio." (See Monetary Systems,
page 64).

146 BIMETALLISM

SEC. 270. Since 1873, silver being denied access to
the mints, and being coined only for the Government,
and out of bullion purchased by the Government, there
has arisen for the first time since the establishment of
free coinage a general " market value " of silver entirely
distinct from its coinage or mint ratio.

SEC. 271. It being apparent that the link that held
the metals together prior to 1873 was the right of access
to the mints on equal terms and the conferring of equal
monetary power on each of the metals when coined at the
mint ratio, it follows that any force that is sufficient to re-
establish the broken link can restore the former relative
value of the metals. No international agreement for a
coinage ratio ever existed, and yet, prior to 1873, there
was no serious fluctuation in the relative value of the
metals. They were held together by the law that gave
them equal mint privileges and equal monetary power.

SEC. 272. What has been done can be done again. As
France from 1803 to 1873 held the value of the precious
metals comparatively steady by simply keeping her mints
open on equal terms to both metals, so any nation that is
able to receive, coin, and float as money all the silver
bullion that is presented at its mints for coinage purposes
and that will keep its mints open at all times for the
reception of gold and silver on equal terms and make the
coins of both an equal tender for all purposes, can restore
the broken link; and that restored, the value of silver will
re-assert itself.

SEC. 273. Notwithstanding the adverse silver legisla-
tion there is still being coined a large amount of silver.
On the closure of the Indian mint and the repeal of the
purchasing clause of the Sherman Act, both of which
events occurred in 1893, the annual coinage of silver fell
off, and for the first time silver fell in value — as measured

BIMETALLISM IN THE UNITED STATES 147

by commodities — below its value or purchasing power in
1873.

SEC. 274. The world's coinage of silver for 1894 and
since that time has been as follows: (See Reports of
Director of the Mint, 1897, page 54, and for 1898, page
266).

1894 $113,095,788

1895 126,873,642

1896 159,540,027

1897 167,760,297

SEC. 275. The coinage for the years 1896 and 1897,
after making allowance for the silver consumed in the
arts and manufactures, virtually consumed all the silver
produced in those years, and this confirms the estimates
of statisticians that there is but very little silver bullion
now in stock, certainly not to exceed 50,000,000 ounces,
outside of that held by the various governments, that is
to say, there is not to exceed 50,000,000 ounces (probajbly
not half that amount) of silver bullion now for sale in all
the markets of the world. It will also be seen that there
is now a constantly and rapidly increasing demand for
silver for coinage purposes.

SEC. 276. The world's demand for money is more
than sufficient to absorb all the gold and silver produced.
The mint ratio of the great coining nations of the world in
force prior to 1873 fixed the relative value of gold and
silver, and created an unlimited demand for the entire
output at the ratio fixed. As long as this unlimited
demand existed it was impossible for either of the metals
to fall in value below its coinage ratio because the mint
stood ready to receive and coin into money at the mint
ratio any surplus of either of the metals that might remain
after the demand for use in the arts and manufactures
had been satisfied. Since 1873, however, silver has been

148 BIMETALLISM

denied access to the mints on terms of equality with gold,
the unlimited demand for silver has ceased, no important
commercial nation is now coining silver on private
account; the silver now being coined is from bullion pur-
chased by governments at its " market value." Although
the mints remain open at a fixed price to all the gold pre-
sented they are closed to silver. In other words, silver
has ceased to be a money metal — in the strict sense of the
term — and is now simply a commodity and is subject to
all the fluctuations in value arising from supply and
demand like any other commodity.

SEC. 277. The source from which the precious metals
derive the greater part of their value is their use as
money. If their use as money should be discontinued by
all nations they would unquestionably lose much of their
present value, probably three-fourths, possibly much more
than three-fourths. The fall in the value of silver caused
by its partial demonetization conclusively proves this to be a
fact. There can be no doubt that denying to silver access
to the mints on terms of equality with gold, although a
large amount of silver is still being coined into money
from bullion purchased by the various governments at its
"market " value, has reduced the value of silver one-half
as measured by gold, which is still a money metal, and if
its coinage should be entirely discontinued it would lose
one-half or two-thirds, possibly three-fourths, of its
present value.

SEC. 278. If the United States should restore to silver
unlimited mint [privileges at the ratio of 16 to 1, and
make the silver when coined a full legal tender for all
purposes, silver bullion would immediately become worth,
at least in this country, $1.29 per ounce. An ounce of
silver coined at the ratio of 16 to 1 will coin out $1.29,
and if the coinage is unlimited and gratuitous, an ounce

BIMETALLISM IN THE UNITED STATES 149

of silver uncoined would be of the same value as an ounce
of silver coin, and nobody would sell it for less than its
coinage value. If the coinage was free and unlimited,
but subject to a seigniorage charge for coinage, then an
ounce of silver bullion would be worth an ounce of coined
money less the charge for coinage.

SEC. 279. Can the United States without interna-
tional agreement establish a ratio of 16 to 1 between gold
and silver bullion, and by so doing raise the price of silver
bullion to $1.29 per ounce and hold it comparatively
steady in all the markets of the world? If this country
can receive, coin, and float as money, all the silver
bullion that will under such ratio be presented to our
mints for coinage purposes, and if it makes the silver,
when so coined, a legal tender for all purposes, and repeals
all laws permitting silver to be discriminated against in
private contracts, then we can maintain the value of the
coin at its coinage ratio. If, however, we cannot coin
and float as money all the bullion presented for coinage,
or if we allow silver to be treated as inferior to gold by
any person who may desire to discriminate in favor of
gold, or if we make our silver money a partial legal
tender only, if we deny it access to the mint on equal
terms with gold, in other words, if we purposely degrade
our silver money by legislation, then, of course, its
value cannot be maintained.

SEC. 280. Can we receive, coin and float as money
all the silver that will be presented at our mints for
coinage? We have already seen that there is not to
exceed 50,000,000 ounces of surplus silver bullion for
sale, and no one will question the fact that this country
could very easily absorb that amount with great advan-
tage to the business interest of the country. It therefore
follows that, unless silver now in coin and in circulation

150 BIMETALLISM

as money in other countries should be sent here for sale,
there would be no difficulty in maintaining a ratio of 16
to 1. Is there any probability of coined silver now
circulating as money in other countries being sent here
for recoinage?

SEC. 281. The Director of the United States Mint in
his Annual 1897 Report (see Finance Report, 1897, page
216), estimates the silver money in the world at
$4,268,300,000, which he locates as follows:

In the United States $ 634,500,000

In Europe 1,216,900,000

In Asia 2,229,400,000

In America exclusive of the United States 170,900,000

In Africa, Australasia and all other countries 16,600,000

$4,268,300,000

SEC. 282. There is not a commercial country today
in the world that is not reaching out for more silver for
coinage purposes, and there are but two countries —

NOTE.— The above figures were taken from the 1897 annual report of the
Director of the Mint, which was the latest published report when this chapter was
written. In the 1898 annual report, since published, notwithstanding the fact that the
silver coinage for the year 1897 was $167,760,297, the Director of the Mint for reasons
no doubt satisfactory to himself, but which he does not explain, reduces his estimate
on the total amount of silver coin from $4,268,300,000 in 1897, to $3,977,500,000 in
1898— a reduction of $290,000,000, to which, if you add the coinage of 1897, $167,000,000,
makes a total deduction of $457,000,000. In 1897, he estimates the silver coin in Asia
at $2,229,400,000, and in 1898 he estimates it at $1,817,400,000, a reduction of
$412,000,000 in a single year, notwithstanding the fact that there was a large silver
coinage in Asia during that year. When I received the 1898 annual report and
noted the great discrepancy between it and the report for the former year, I determined
to re-write this chapter, but on further examination of the reports issued from the
Treasury Department, I found that the reports of no two years agree and that
estimates based on the statements contained in any one of the reports would not
agree with estimates based on statements contained in any other report, and con-
cluded that I might as well let the chapter remain as it had been written, because
if re-written and based on the estimates contained in the 1898 report, it would be no
more likely to agree with the 1899 estimates of the Department than would the
estimates of 1897.

The estimates of the Treasury Department in regard to gold are subject to as
serious and unaccountable fluctuations as those in regard to silver. For example,

BIMETALLISM IN THE UNITED STATES 151

Mexico and Japan — which coin silver at a lower ratio to
gold than 16 to 1. And, consequently, there are no
countries except Mexico and Japan that could send their
silver coins to this country under a ratio of 16 to 1 with-
out sustaining a loss on the face value of their coins.
(See Annual 1898 Report of the Director of the Mint,
page 48).

SEC. 283. The full tender silver money in Europe is
coined at a ratio of 15^ to 1, and their subsidiary silver
money is coined at a ratio much more favorable to silver,
all of it at ratios below 15 to 1, and some of it — that of
Russia, Germany and Austria — at ratios below 14 to 1.
None of this European silver coin could be sent to this
country at our proposed ratio of 16 to 1 without a loss to
the shipper, on the face value of the coin, of at least 3
per cent., besides cost of transportation, and none of it
can be spared from the stock of money of the several
countries where it is now circulating side by side with

the 1897 report estimates the stock of gold in Great Britain at $584,000,000. The 1898
report shows the gold coinage of Great Britain during the year to have been $8,654,764
(see p. 48), and the excess of imports of gold into Great Britain over exports of same
to have been $677,509. (See 1898 Report, p. 132). If the estimate of 1897 of
$584,000,000 was based on gold coins, then the coinage of gold during the year, less
excess of exports, if any, should be added to find the amount on the first of January,
1898. If, however, the estimate included both coin and bullion, which is probably the
case, then the excess of imports over exports of gold during the year should be added
to the stock on hand in 1897. In either case there would be an increase in the stock of
gold, and not a decrease of $146,000,0000 as estimated by the Treasury Department.

Del Mar in the second edition of the " Science of Money," page 192, in speaking
of the reports published by the Director of the Mint and the Comptroller of the
Currency says:

" The Government of the United States is now so strong and rich that, in the
scramble of nations for the world's scant stock of the precious metals, it probably has
the power to secure more than its due share. In other words, the great European
syndicates should no longer be permitted to monopolize the flow of the precious
metals. With an independent policy, the Treasury and Banks of the United States
are capable of exerting an important influence upon this movement. It ill-becomes the
possessor of such power to permit the employment of the feeble and juggling tables
of 'coins in circulation' published by the Dire tor of the Mint and the Comptroller of
the Currency."

152 BIMETALLISM

gold and discharging the money function at its nominal or
face value equally as well as gold. The demand in
Europe is for more silver money. The coinage of silver
in Europe for the year 1896 — the last year for which we
have official reports — (see United States 1897 Finance
Report, page 309), was $56,750,000.* Does the coinage
of $56,750,000 of silver money in Europe, in a single
year, indicate that Europe has more silver money than
she can use to advantage? Does it indicate that Europe
would be glad of an opportunity to get rid of her silver
money, and that if the United States should go to free
coinage she would dump her silver money on us? Such
a claim is too absurd for serious consideration. Free
coinage in the United States, resulting as it would in
raising the value of silver bullion, not only in the United
States but also in Europe and all over the world, would
not attract silver from Europe to this country, but, on
the contrary, would increase the European demand for
silver.

SEC. 284. The only reason there is not even now a
greater demand in Europe for silver for coinage purposes
is the fear of a further fall in the gold price of silver. If
the United States should restore to silver the right of free
and unlimited coinage at a ratio of 16 to 1, no fear of a
decline in the value of silver would any longer be enter-
tained by any sane man. Europe, with her more than
four hundred million people, nine tenths of whom
handle no money but silver money, requires a much
larger volume of silver money than she now has, and
when she is assured, as she would be by a bimetallic law
in the United States, that the value of silver will here-

* The silver coinage in Europe in 1897, as shown by 1898 Report of the Director
of the Mint (p. 206)— received since this chapter was written— was $56,841,157, a trifle
greater than the coinage of 1896.

BIMETALLISM IN THE UNITED STATES 153

after be maintained at a parity with gold, her demand
for silver for coinage purposes would be largely increased,
probably doubled.

SEC. 285. The $2,229,000,000 of silver money in
Asia is coined at a ratio of 15 to 1; and at that ratio an
ounce of silver will coin out $1.37. There is virtually no
gold money in Asia, and the people of Asia will not
part with their silver coins under any consideration.
None of it could be sent here under free coinage in this
country at 16 to 1 without a loss of at least seven cents
per ounce on its coinage value, besides cost of trans-
portation. None of it can be spared. The demand in
Asia is for more silver. Even the gold standard advo-
cates do not claim that any silver would come to this
country from Asia.

SEC. 286. In the rest of the world, exclusive of the
United States, to-wit, in Egypt, Cape Colony, South
African Republic, Australasia, and all of North and South
America, exclusive of the United States, there is, as
reported by the Director of the United States Mint,
$171,000,000 in silver coin. The population of the
several countries in which this coin is located is shown
by the same report to be 75,600,000, which would give
them a per capita circulation in silver of $2.38. It is not
at all likely that very much of this coin would come to
this country under a free coinage law. We might and
probably would get some silver from Mexico, but we
could not by any possibility get enough from any, or all,
of these countries to increase materially our stock of
silver money. If every dollar's worth of silver coin out-
side of Europe and Asia would come to this country and
it should all be coined into our money it would add but a
trifle more than two dollars per captia to our circulation,
and I think it will be conceded by all candid men that

154 BIMETALLISM

such an addition to the money volume of the country
would be a blessing rather than an injury.

SEC. 287. Moreton Frewen, an eminent English
economist, in a letter written to the Hon. R. P. Bland,
May 10, 1896, said:

" As to whether by giving silver free coinage your great country
can maintain steady exchange everywhere at 16 to 1 between gold
and silver, I am not going to dogmatize. Hermann Schmidt, whose
knowledge of exchange problems entitles his opinion to respect,
thinks you can. For my own part, I have always

believed that Lord Aldenham— then Mr. Gibbs — was right when
he declared in his evidence before the Currency Commission in 1886
that any first class nation, but especially America, could go safely
to free coinage. * * On a certain Monday in June, 1893,
the ratio between gold and silver was as 1 to 24; on Friday of the
same week it was as 1 to 30; your ' seventy cent dollar ' had become
a 'fifty cent dollar,' and why? Because the mints of a single
foreign country — India — not a first class country in point of trade
—had been closed. Presumably, then, had the India mints re-opened
on that Friday the ratio would have reverted from 1 to 30 to 1 to 24
before the following Wednesday. Now, let us ask those who
object to free coinage in the United States, what would have been
the effect if on the same Wednesday you had opened your mints to
the free coinage of silver? If India, single handed, had been able
to raise the ratio 20 per cent. — that is from 1 to 30 to 1 to 24, by free
coinage, would not the addititional support of the United States
have carried the ratio to 1 to 16, a raise of 33 per cent, more? And
if the United States could not have accomplished this through free
coinage, will somebody explain why?

- SEC. 288. In his examination before the Indian Cur-
rency Committee, March 16, 1899, immediately following
a discussion of the possibility of the United States, India
and France opening their mints to the free coinage of
gold and silver, at a ratio to be agreed upon between
them, and certain members of the Committee having
expressed a doubt of France entering into such an agree-
ment, Lord Aldenham said:

BIMETALLISM IN THE UNITED STATES 155

" Ques. 12,873. You said you would like France to come into the
suggested international agreement?
" Ans. — Certainly, and anybody else.

" Ques. 12,874.— Have you any reason to believe that they would
be open to entertain such a proposal?

" Ans. — I know that, whereas they were indisposed, there is now
a turn in the tide in that respect, they are certainly more willing to
entertain the contemplation of such a thing. As you will see from
Colonel Hay's letter, he also takes that view.

" Ques. 12,875. — But you do not consider their consent essential
to an agreement of that kind?

" Ans. — I do not.

" Ques. 12,876. — You think that America and India together
would form a broad enough basis?

" Ans.— I should say America alone, the Indian Mints being open
to silver. I do not say America and India together, because it
would involve putting India upon a bimetallic system, which I do
not desire. What I mean is, that the United States could do it alone,
because France for eighty years almost alone maintained the ratio
of 15X to 1, without a check, and with not the slightest difference
in the world, aided one may say — though the aid was not very great
—toward the end of the time, (it was really nearly a hundred years)
by the other nations; I cannot say when they began to take the
same view or adopt the same ratio. I remember when Greece
and Switzerland were on no such ratio. 1 say that if France could
maintain it for that time, the United States could maintain it quite
as well now. The members of the Gold and Silver Commission
expressly said that what would enable two or three or four nations
to maintain that ratio depended on their population and commerce.
Now, the population of France was then somewhere about 32 or 33
millions. The population of the United States is said to be some 75
millions. The population of the whole Latin Union was 75 millions.
So that the United States have the same population that those
other countries together had. And then we have to add that it is
not population only, but commerce; indeed, when we talk of com-
merce you must include population, because if you have no popula-
tion to produce exports and no population to consume imports, there
can be no foreign commerce. Now, the commerce of the United
States, internal and external, is very much superior to that of

156 BIMETALLISM

France when France was able to maintain the 15^ to 1. There-
fore, I say, I feel no doubt in my own mind that, as France main-
tained a much more difficult ratio, that of 15^ to 1, the United
States would have no difficulty in maintaining 22 to 1. But for
political reasons, and prudential reasons too, they say we must con-
sult with other nations."

SEC. 289. In the above discussion the Committee was
considering a ratio of 22 to 1, which, if adopted, would
raise the present price of silver bullion, as measured by
gold, about 50 per cent. Now, does it not necessarily
follow that if the opening of the mint of an important
nation, like the United States, to the free coinage of
silver at a ratio of 22 to 1, would raise the commodity
value of silver 50 per cent., and make the commodity
value and coinage ratio coincide at the 22 to 1 ratio, that
if the mint was opened at the ratio of 16 to 1 that the
commodity value and the coinage ratio would coincide at the
16 to 1 ratio? In either case, if the country maintaining
the open mint is able to receive, and does receive, coin
and float as money, at the ratio it has established all the
bullion presented at its mint, it can maintain the
established ratio, whether it be 22 to 1, 16 to 1, or any
other ratio within any reasonable limit, and if it cannot
do this it cannot maintain any ratio.

SEC. 290. The world's volume of silver money
amounts to about $4,000,000,000, nearly all of which is
circulating side by side with gold and is discharging the
money function equally as well as gold for all purposes
except for exchange between gold-using and silver-using
countries. It now constitutes a part of the world's
volume of money rated at its nominal or coinage value.
An international agreement establishing a ratio of 22 to 1
would reduce the present money value of the world's
silver money from $4,000,000,000 to $2,783,000,000 and

BIMETALLISM IN THE UNITED STATES 157

cause an immediate contraction in the money volume of
$1,217,000,000. Such a contraction in the volume of
money would produce a financial crisis "the far spread-
ing effects of which it would be impossible to foretell."
Better, a thousand times better, that things should
remain as they are than to change the ratio to 22 to 1, or
to increase the amount of silver at all in the silver dollar.

SEC. 291. Several plans have been suggested, some
of them by men of standing as financiers, for increasing
the monetary use of silver, or as a kind of compromise
between the bimetallists and the gold monometallists. No
doubt some of these plans have been suggested in good
faith, but they are all fatally defective in this, that they
do not propose to do the one thing necessary, namely, to
give to silver the same mint privileges and same monetary
power that they give to gold. Horace Greeley, in 1870,
in discussing the question of the resumption of specie
payments, after showing the absurdity of the plans sug-
gested by the so-called financiers of that day, said: " The
way to resume is to resume." He insisted that when
the Government ceased to discriminate against its paper
money, when it received its paper money for all demands
due the Government, it would become as good as gold.
In this he was unquestionably correct. The way and the
only way to re-establish the former ratio between gold
and silver, or to establish and maintain any ratio between
them, is to give both metals equal mint privileges and
equal monetary power at the proposed ratio.

SEC. 292. There can be no doubt that the link which
held the metals together prior to 1873 was equal mint
privileges and equal monetary power; and any plan that
does not include the restoration of this broken link must
fail. It stands to reason that the relative value of two
metals one of which is simply a commodity and subject

158 BIMETALLISM

all the fluctuations resulting from the law of supply and

uncertain demand and the other a money metal for which

there is an unlimited and insatiable demand at a certain

fixed price cannot be held together at the same relative

value.

SEC. 293. In " 1878 it was believed by many of the
members of our Congress that the decline in the value of
silver as measured by gold had been caused by the over-
production of silver, and that, if a demand could be
created for the surplus silver, the former relative value of
gold and silver bullion would be restored. Acting upon
this belief the Bland-Allison Act was passed. This law
created a demand for two million dollars' worth of silver
bullion per month. This increased demand caused a rapid
rise in the price of silver bullion for a few months, but soon a
reaction set in and silver again fell to a lower level than
before Not satisfied with this experiment and still
believing that if the demand was great enough the old
relative value of gold and silver bullion would certainly be
restored, the Sherman law was passed. This law
increased the demand for silver bullion to four million five
hundred thousand ounces per month; again the price was
stimulated and silver rose rapidly in value for a short
time, but it soon fell again in value to a lower level than
before. People then began to see that demand alone
would never restore the former ratio, and that the only
remedy was to give back to silver what had been taken
from it, namely, equal mint privileges and equal monetary
power.

We have already seen that there is now a demand for
all the silver produced, that there is no surplus silver in
stock, and yet the price has a downward tendency. The
only solution of the problem is to again make silver a
money metal. When this is done gold and silver will

BIMETALLISM IN THE UNITED STATES 159
again become of equal value at the ratio fixed, whether
that ratio is 16 to 1, 22 to 1, or 32 to 1. If it is desired to
still further reduce prices, if it is believed that there is
too much money in the world, then the ratio of silver might
be lowered to 22 to 1, or 32 to 1, but there can be no
other possible reason for reducing the value of silver.

SEC. 294. Mr. Alfred de Rothschild, delegate from
Great Britain to the International Monetary Conference
held at Brussels in 1892, (see report, p. 70) for the alleged
purpose of promoting the greater use of silver, submitted
the following proposition:

" The American Government are purchasers of silver to the
extent of fifty-four million ounces yearly, and I would suggest that,
on condition these purchases were continued, the different European
Powers, should combine and make certain yearly purchases, say to
the extent of about £5,000,000 sterling annually, such purchases to
be continued over a period of five years at a price not exceeding 43
pence per ounce standard, but, if silver should rise above that price,
the purchases for the time being to be immediately suspended."

SEC. 295. When we take into consideration the fact
that the average annual coinage of Europe 1891, 1892,
1893 amounted to over $32,000,000, considerably over
^6,000,000 sterling,and the proposal of Mr. de Rothschild
was that "to extend the use of silver generally" the
"European Powers should combine to make certain
yearly purchases, say to the extent of about ^5,000,000
sterling," coupled as it was with the proviso that the
purchases should immediately cease if the price of silver
advanced beyond 43 pence per ounce, it is difficult to
believe that the proposal was seriously made. The
amount of silver the proposal suggested that Europe
should purchase was less than it was taking at the very
time the proposal made, and was coupled with the further
proviso that if silver advanced in value to 43d. per ounce

160 BIMETALLISM

(about 93 cents) then purchases should cease. At the
time this conference was in session silver was worth 87
cents per ounce and Mr. de Rothschild proposed to hold it
there " in order to extend the use of silver " and if it
advanced in value 6 cents per ounce then the European
Powers should combine to keep it down. It appears from
the proceedings of the Conference that the proposition
was seriously considered and discussed although (very
fortunately for the cause of silver) it was not adopted.

SEC. 296. Anson Phelps Stokes, in a book entitled
" Joint-Metallism," published in 1896, suggests a plan
which he calls " a safe and honest plan by which both
gold and silver, permanently and at their market value,
may be made available as the metallic basis of currency."
(See his book, " Joint-Metallism," page 3).

His plan is to coin the same weight of silver as there is
weight of gold in the $5 gold piece. He proposes to call
such silver coins " standards;" that a law shall be enacted
providing that all debts of $10 or upwards contracted six
months or more after the passage of the act may be paid
one-half in gold coins and one-half in such number of
standards as shall be approximately equal thereto accord-
ing to the Government ratio; and that the Government
ratio shall be fixed by the Secretary of the Treasury on
the first day of each month (commencing six months after
the adoption of the law); that the Secretary shall desig-
nate the number of standards most nearly the average
relative market value of gold and silver; this number to
be the ratio for that month.

SEC. 297. Under Mr. Stokes' plan of " Joint-Metallism"
not only would silver bullion remain a commodity but also
the silver coins now in existence would be reduced to the
position of a commodity and rated at a gold valuation. The
$4,000,000,000 in silver coins now in circulation and now

BIMETALLISM IN THE UNITED STATES 161

discharging the money function at its face value equally
as well as gold, under such an arrangement would lose
more than one-half of its present money value and the
value of the world's money would be reduced more than
$2,000,000,000. Such a reduction in the volume of
money would produce a financial crisis such as the world
has never known and would reduce to bankruptcy nine-
tenths of the business men all over the world. It is to be
hoped that but few men can be found who would give
their assent to such a foolhardy experiment.

SEC. 298. Geo. H. Bonebrake, President of the Los
Angeles National Bank, about two years since formulated
a plan for the " free and equal coinage of gold and silver"
from which I copy the following:

"The country should adopt a single gold standard: So many
grains of gold should be a dollar, yet my idea is that, notwithstand-
ing gold should be the standard there can be other money coined
and made as valuable as gold. Why not the free and equal coinage
of gold and silver? It is not impossible, but a very easy matter to
coin dollars of silver equal in value to the gold dollar. To do this a
Commission of eminent financial men might be appointed to take
into consideration the additional value that has been given to gold
by the practical demonetization of silver, and the depreciation of
silver by its practical abandonment as money. The commission
should have the power to suggest the relative values between gold
and silver and that the gold dollar coined should be equal in value
to that of silver, and the silver dollar should be equal in value to
that of the gold and that both should be legal tender for any and all
debts whatever. We need a broader basis of redemption money
than we have at present."

SEC. 299. If it is true as stated by President Bone-
brake, that the divergence between gold and silver has
been caused by the demonetization of silver, and it
unquestionably is true, then why not restore to silver by
law what we have taken from it by law and end the
difficulty? If as Mr. Bonebrake says gold has appreciated

162 BIMETALLISM

and silver depreciated on account of depriving silver of
the right of access to the mint and depriving it of its
money function, does it not necessarily follow that by
restoring to silver its mint privileges and its monetary
power the old relative value between the metals would
re-assert itself?

SEC. 300. Some years ago Col. S. N. Wood, a promi-
nent Greenback orator of Kansas, who was thoroughly
posted on economic questions, after reviewing several
proposed plans for giving silver a more extended use as
money and for keeping its ratio to gold steady and after
showing such proposed plans must fail for the reason that
not one of them even suggested the removal of the cause
which had produced the divergence between them, in
way of burlesque, suggested a plan for keeping the
commodity value of gold and silver coins on a parity,
for which he did not claim perfection but which, in his
opinion was superior to any of the plans suggested.

Mr. Wood's plan was that the silver dollar when coined
should be coined with holes in it ranging in size from an
ordinary pin to that of a good sized slate pencil. He sug-
gested that when the Government issued any of these
dollars it should furnish the persons receiving them with
an assortment of silver plugs suitable for these holes (the
Government to charge for the plugs the value of the silver
contained in them). The holder of these dollars Mr.
Wood claimed would be prepared for any emergency that
could possibly arise. If silver should fall in value he
could put in one or more of his plugs, if it should rise in
value he could knock out a plug. This plan, Mr. Wood
insisted, would be much more simple and satisfactory
than any of the plans that had been suggested. This
plan would save the expense of a Commission to deter-
mine the relative value of the two metals as any man of

BIMETALLISM IN THE UNITED STATES 163

ordinary intelligence could plug up a hole or knock out a
plug as the case might require. In this way said Mr.
Wood the relative value of the two dollars could be main-
tained, both dollars would be equally honest and the
honor of the Government sustained. Such a currency he
said would be flexible and elastic and suited to the wants
of a great commercial people.

Of course Mr. Wood was simply burlesqeuing the plans
that had been proposed, but I submit to the reader
whether the plan proposed by Mr. Wood is not as
sensible and a good deal more philosophical than that of
Rothschild, Stokes, or Bonebrake, or any other plan that
does not propose to give both metals equal mint privileges
and equal monetary power.

SEC. 301. Of course no country could raise the price of
silver bullion from 60 cents per ounce to $1.29 per ounce or
to 93 cents per ounce by simply declaring that thereafter
the price of silver bullion should be $1.29 per ounce or
93 cents per ounce, nor could it raise its price at all
without setting in motion some economic force that would
act on the value of silver bullion. Prior to 1873 the
economic force set in motion by the great coining nations
of the world that held the relative value of gold and silver
comparatively steady all over the world was the law
creating an unlimited demand at the coinage ratio for all
the gold and silver bullion in the world and conferring
upon the coins of both metals the same monetary func-
tions. Some of the nations, It is true, coined gold only,
some silver only, and some both gold and silver, but
taken together there was an unlimited demand for both
gold and silver at the mint price. So long as this
unlimited demand continued and the coins of both metals
had equal monetary power it was impossible for the
value of either metal to fall below its coinage ratio.

164 BIMETALLISM

In countries where one of the metals was undervalued
as rated by the mint ratio of other nations that metal was
liable to go to a premium in the country undervaluing it
to an amount equal to its undervaluation, in which event
the coin would be exported to those countries giving it a
higher valuation, but the premium could not exceed the
difference in the valuation fixed by the mint ratio of the
exporting and importing countries. Neither was it
possible for either of the metals to fall in value below the
coinage ratio of any important coining country that was
able and willing to receive, coin, and float it as money.
And it is equally true today that any country that is
sufficiently powerful to create and maintain an unlimited
demand for all the silver bullion presented at its mint at
a certain fixed ratio between the metals can maintain
that ratio whether the ratio be 32 to 1, 22 to 1, 16 to 1,
15 y2 to 1 or any other ratio fixed within any reasonable
limits.

SEC. 302. Sir Guilford Molesworth, delegate from India
to the International Monetary Conference of 1892, after
having shown that France for three-quarters of a century,
unaided and alone, and during periods extending over
many years when the relative value produced of first one
and then the other of the metals had been largely in
excess, sometimes three-fold and even four-fold in excess
of the other, had maintained their relative values com-
paratively steady at the mint price, said: " With this
remarkable experience to guide us, it appears probable
that the United States of America, if they had the
courage to make the plunge, might maintain the equi-
librium single-handed."

SEC. 303. I have no doubt that the United States can
safely go to the free coinage of silver at a ratio of 16 to 1
without an international agreement, and that on the

BIMETALLISM IN THE UNITED STATES 165

adoption of a bimetallic law in this country — giving silver
and gold free access to our mints on equal terms at that
ratio — and making the money coined from both metals a
full legal tender for all purposes, and prohibiting either
of them from being discriminated against by private con-
tract, this country can maintain their relative value
approximately steady in all the markets of the world.

SEC. 304. In an article published in the Arena for June,
1896, I gave many reasons, other than those given in
this chapter, why the United States could safely go to
free coinage. By the courtesy of the Arena I am per-
mitted to re-publish that article as an Appendix to this
volume, and I call the attention of the reader to that
article for additional reasons why the United States,
without an international agreement, can maintain bimet-
allism. Further investigation has confirmed me in the
belief that my conclusions in 1896 were correct.

CHAPTER XIX.

THE UNITED STATES ON A SILVER BASIS.

SEC. 305. Let us suppose that on the adoption of free
coinage of silver in the United States, gold would go to a
premium, and that eventually it would be exported from
the country, and the United States would go to a silver
basis — what effect would such a change in the monetary
system of this country have on the welfare and prosperity
of the people? I do not think there is any probability that
under a bimetallic law which gave gold and silver equal
mint privileges and equal monetary power for all
purposes, gold would go to a premium, or that it would
be exported from the country; but that we may examine
this question under every contingency that could possi-
bly arise, let us suppose that it would, and that eventu-
ally it would all be exported from the country.

SEC. 306. No one anticipates that the Government,
or the individuals, or the corporations, now owning the
$900,000,000 of gold coin said to be in this country,
would give it away; consequently if the gold was
exported from the country we would receive in exchange
for it either money of some other kind — presumably
silver — or commodities of equal value with the gold
exported, or securities executed by our Government, or
by our corporations, or by our people and now held in
foreign countries. If our gold should be exchanged for
silver money, and the silver money had the same

UNITED STATES ON A SILVER BASIS 167

purchasing power in this country as the gold — as it
necessarily would have under a properly executed
bimetallic law — then we would have the same amount
of money in the country after the exchange was made
that we had before, and business would go on as before.
If the gold was exchanged for commodities, then the
actual wealth of the country would be increased in an
amount equal to the value of the commodities so received
in exchange for the gold exported. If the gold was
exchanged for American securities held abroad, then our
foreign debt to the amount of $900,000,000 would be
paid, and the annual drain of the interest on that sum
(probably about $45,000,000) would cease. -

SEC. 307. We have already seen that any nation can
float a volume of money without any regard whatever to
the material of which it is made, equal to its distributive
share of the world's money. It therefore necessarily
follows that if $900,000,000 in gold should leave the
country, and silver did not come to our mints to fill the
vacuum so created in our currency, paper money might be
issued and maintained at a par with gold to an amount equal
to the gold exported until a sufficient volume of metallic
money was forthcoming. Also if our gold was exchanged
for commodities, and silver did not come to the mint to
supply the place of the gold so exported, paper money
could be used for that purpose. In either of these cases,
instead of being injured, we would be benefitted by the
exportation of the gold; in the first place, by the
extinguishment of $900,000,000 of our foreign debt, and
by the annual saving of $45,000,000 in interest charges;
and in the second place, by an increase in the actual
wealth of the country of $900,000,000, and the substi-
tution—as Ricardo says — of "the cheapest in place of
the most expensive me'dium " of exchange.

168 BIMETALLISM

SEC. 308. If the gold was exchanged for money, and
the money received was of the same value as the gold,
then, of course, no injury or inconvenience would result
from the exchange. Ah! but, say the gold standard
advocates, the money received would not be of equal
value with gold; the money received would be silver,
and would be worth about one-half as much, dollar for
dollar, as gold is worth. When it is suggested to these
gentlemen that it is hardly probable that the men who
own the gold now in the United States would exchange it
for money worth only half as much, dollar for dollar, but
that they would demand value for value, they reply:
"Well, if worth as much at the time the exchange was
made it would soon depreciate, and if we permit the free
coinage of silver at the ratio of 16 to 1 the United States
will soon be on a silver basis." While 1 do not believe
that there is any probability of this country going to a
silver basis on the adoption of the free coinage of silver,
yet, if it did, would we be injured by it?

SEC. 309. John P. Young, an able economist and
managing editor of the San Francisco Chronicle, in an
article on Bimetallism published in that journal August 3,
1893, said:

" But the suggestion that this country might have a sole silver
currency is the ' bogie ' that frightens many who know little or
nothing of the subject. To have a sole silver CURRENCY, in their
eyes means unparalleled disaster. Such people completely ignore the
fact that during the period that we had a sole gold currency no one
thought that the country was threatened with ruin because the
dearer silver was not coined. Such as gave the subject a thought
at all and had any real knowledge of the difficulty desired that the
mistake of undervaluing silver might be corrected, but they would
have judged a man a fit candidate for the lunatic asylum had he
asserted that disaster would certainly follow the free coinage of gold
because it was cheaper than silver. * * If a nation has
resources, and a people capable of developing them, it will increase

UNITED STATES ON A SILVER BASIS 169

its wealth no matter what sort of money it employs to circulate
values, provided the standard of values is not tampered with.

" Between 1860 and 1880 the precious metals, silver and gold,
were not used to circulate values in the United States. Our only
currency was the greenback — except in California. There was no
demand for gold except that artificially created by promising to pay
the interest on bonds in money of that metal, yet during the period
in question, in spite of a devastating war during which production
was interrupted, and vast quantities of property destroyed, the
wealth of the United States increased from $16,160,000,000 to
$43,642,900,000, or nearly three-fold in twenty years. If the theory
of those who make a fetich of gold were sound this could never
have happened. Nor while we were increasing our wealth at
home, did our foreign trade suffer. That went on precisely as
described by John Stuart Mill in his chapter on ' The Foreign Ex-
changes.' After applying an illustration, Mill remarked:

" ' It thus appears that a depreciation of the currency does not affect the foreign
trade of the country. This is carried on precisely as if the currency maintained its
value. * * If the currency is depreciated 10, 15 or 20 per cent., then in
whatever way the real exchange arising from the variation of international debts and
credits may differ, the quoted exchange will always vary 10, 15 or 20 per cent, from it.
However high this nominal premium may be, it has no tendency to send gold out of
the country for the purpose of drawing a bill against it and profiting by the premium,
because the gold so sent must be procured, not from the banks at par, as in the case
of a convertible currency, but in the market at an advance of price equal to the
premium.' " (See Mill's Political Economy, Book 3, Chap. 22, Sec. 3).

SEC. 310. Professor Cairnes, in his "Leading Princi-
ples of Political Economy," says:

" It appears to me that the influence attributed by many able
writers in the United States to the depreciation of the paper cur-
rency, as regards to its effects on the foreign trade of the country, is
in a great degree, PURELY IMAGINARY. An advance in the scale
of prices, measured in gold in a country, if not shared in by other
countries, will at once affect its foreign trade, giving an impulse to
importations, and checking the exportation of all commodities other
than gold.

"A similar effect is very generally attributed by American writers
to the action on prices of the greenback inconvertible currency. But
it may be easily shown that this is a complete illusion. Foreigners do
not send their products to the United States to take greenbacks in
exchange. The return which they look for is either gold or the

170 BIMETALLISM

COMMODITIES of the country; and if these have risen in price in
proportion as the paper money has been depreciated, how should the
advance in prices constitute an inducement for them to send their
goods thither? The nominal gain in greenbacks on the importation
is exactly balanced by the nominal loss when those greenbacks
come to be converted into gold or commodities. The gain may, in
particular cases, exceed the loss, but if it does, the loss will also, in
other cases, exceed the gain. On the whole, and on an average,
they cannot but be the equivalents of the other." (Quoted from
Senator Jones' 1893 speech, page 307.)

SEC. 311. What is true in regard to depreciated paper
money would also be true in regard to depreciated
silver money. As a depreciated paper between 1860 and
1880 did not in the least impede or even inconvenience
our foreign trade and did not prevent a rapid development
of the country, and a rapid increase of wealth, so a
depreciated silver money, if it should become depreciated,
and the United States was on a silver basis, and had no
money but silver money, would not impede or incon-
venience our foreign trade nor prevent the development
of the country and the rapid increase of wealth; neither
would the fact that it was at a discount, as measured
by gold, drive gold out of the country. What drives gold
out of the country is not the fact that it commands a
premium in other kinds of money in such country, but
the fact that it is worth more in other countries than it is
in the country where it is located. Gold will go where
it has the greatest purchasing power. If gold has greater
purchasing power in Europe than it has in the United
States, due regard being had to freights, commissions,
exchange, etc., it will go to Europe in spite of any effort
we may make to retain it, unless we keep it under lock
and key; in other words, unless we keep the price of
commodities as low in this country as they are in other
countries. To maintain and keep in circulation an inter-

UNITED STATES ON A SILVER BASIS 171

national money we must maintain our price list of com-
modities on a level with the nations with which we have
international trade.

SEC. 312. The fact that the money in circulation is
depreciated as measured by gold, the so-called " money
of the world," does not impede exports is very con-
clusively shown by a reference to the exports from the
United States during the period 1861 to 1880 — both
inclusive— a period of twenty years, during which time
the business of the country was being carried on with a
depreciated, inconvertible, paper money, and the period
from 1881 to 1897, both inclusive, a period of seventeen
years, during which time we have been enjoying the
benefits and advantages of a gold standard. In 1861 the
domestic exports from this country amounted to $204,-
899,616, and in 1880 to $823,946,353, an increase in
twenty years of $619,064,737, or 303 per cent., an.
average yearly increase of 15 per cent, for the entire
time, and this increase was made when the business of
the country was being done with a depreciated, incon-
vertible, paper money. In 1881, the domestic exports
of the United States amounted to $883,925,947 and in
1897 to $1,032,007,603, an increase in seventeen years
of $148,081,656, being 17 per cent, in seventeen years,
or an average annual increase of 1 per cent, under a
gold standard. But it should be borne in mind that the
exports for the year 1897 were exceptionally large, which
makes the showing for the period 1881 to 1897 much
larger than are warranted by the actual exports for the
entire time. If the total time, 1881 to 1897, is taken and
the total exports for that period, it will be found that the
annual average export was only $808,000,000, or less by
$75,000,000 than the exports for 1881, so that under the
gold standard regime the value of exports have actually

172 BIMETALLISM

fallen off; while under a regime of depreciated paper
money they increased over 300 per cent in twenty years.
SEC. 313. At the International Monetary Conference
of 1892 the declaration of the Mexican delegates in
explaining the effects of the so-called depreciation of
silver on the business interests and on the development
of their country (see page 109), said:

" The depreciation of silver, as it appeared to foreign countries —
for in our own country values have not perceptibly changed— has
produced an actual premium on exportation. Articles which were
not formerly exported are now sold in the markets of Europe and
the United States at a loss of 8, 10, or 15 per cent., on the cost of
their production and the expenses incurred, because compensation
is found in the gain in exchange of 25 or 30 per cent., corresponding
to the depreciation of silver, and for this reason the export of articles
other than silver has risen from $6,000,000 in 1873 to $27,000,000 in
1891."

SEC. 314. This shows an increase in Mexican exports
in eighteen years of 350 per cent., or an average annual
increase of over 19 per cent, during that period, on a
depreciated silver money, and the United States— a much
more enterprising and commercial people — have been
actually retrograding during the same time under the
much -vaunted "gold standard" "honest money"
system.

SEC. 315. From a paper read by Professor A. R.
Sprague, before the Andrews Economic Club of Los
Angeles, California, in June, 1898, on the effect of a
depreciated silver money on the industries, progress and
development of countries that are substantially on a silver
basis, I quote the following paragraphs:

" In 1883 there were but sixteen cotton mills in Japan, with
43,700 spindles. In 1894 these had increased to forty-six mills with
505,419 spindles. During the next year, 1895, seven mills with
160,000 spindles were added, and by June 1, 1896, the number of

UNITED STATES ON A SILVER BASIS 173

spindles had increased to 711,000. This would indicate that the
business was profitable, but we are not left to mere inference, for
Consular Reports show that in 1895 forty mills in Osake, Japan,
paid dividends of from 16 to 28 per cent., while the least dividend
declared, even by the mill most poorly managed, was 8 per cent.
During much of this time, British, German, and American mill
owners, whose real fixed charges were constantly increasing as the
premium rose on gold, admitted that they were running at a loss.

" During this same time, too, the foreign trade of Japan increased
from $78,000,000 to $296,000,000. [An increase of 279 per cent, in
thirteen years, or an average annual increase of more than 21 per
cent.] In the same way during this period, Mexico, and India, too,
increased greatly in manufactures and foreign trade. As conditions
now stand our facilities in manufacturing enable us to fill up the
home market in most lines of production by running half or three-
fourths of the time, after which achievement the mills must shut
down until consumption has again depleted the market. This
spasmodic activity is most unprofitable in every way, deluding
workmen by wages which are nominally nearly twice as high as
the real wages, which should be determined by dividing the amount
received per year by the whole number of working days per year.
In case gold should go to a premium, the advantage to us,
(if we were on a silver basis), would enable our manufacturers to
run their factories on full time, and probably increase their present
capacity, thus providing employment for a large portion of our
population that must now be supported in enforced idleness by those
who have work. * *

" The effect upon the producers of agricultural staples would also
be favorable, as it would virtually provide an export bounty, since
almost the entire export is sold in gold standard markets, and the
same advantage would be obtained as was observed in the case of
the cotton cloth exportation. The extraordinary increase in the
export of wheat from India from 1885 to 1895 must be regarded as
due in very large measure to this influence, since it was the only
important new force acting steadily in the same manner through
this decade of years.

" The increased prosperity of India under a falling exchange, due
to an increasing premium on gold, is pretty generally conceded by
the British Commission, although the tremendous influence of the

174 BIMETALLISM

British Civil Service was thrown against the proposition. That
the result would be similar in this country under such a condition
seems most probable both from theory and experience."

SEC. 316. Count Mirbach, in a debate in the Reich-
stag, February 15, 1895, said:

" If America goes over to the silver basis, being united with Asia,
and the two being cut off from the gold lands by such fluctuations
in exchanges, she will blot out all the commerce of the gold-using
nations of the world."

SEC. 317. The London Financial News', one of the
leading financial papers In Great Britain, on March 10,
1896, contained the following leading editorial, which
shows how English financiers regard free coinage in the
United States. The Financial News without doubt is
correct as to the results that would follow free coinage in
this country:

" The financial situation in the United States is very serious.
The Senate has blocked all relief measures proposed by President
Cleveland, and Congress is at a dead standstill on the money
question. The free coinage Senators are masters of the situation.

"The condition of affairs in the United States Congress demands
immediate attention of British financiers and statesmen. The trade
of the world is now in our hands, but it will not long remain there
if the United States goes to a bimetallic basis, with free and
unlimited coinage of silver. With the addition of silver to the
volume of money, everything in America would take on a new face.
Labor and industry would gain new life. The grip of the gold
standard on the products of the world would be loosened, and prices
would rise. Great Britain would lose her markets in South America,
Asia and Europe, and American ships would not be long in captur-
ing the carrying trade of the world. British creditors must now
apply themselves quickly to the American Money-problem.

" The sound money men, and banking interests, led by Senator
Sherman and by Cleveland and Carlisle, with a plentiful supply of
means, have been beaten.

UNITED STATES ON A SILVER BASIS 175

" The American people are now thoroughly aroused and educated
on the power and use of silver money, and made desperate by debt,
and business depression, they are forcing free silver as the main
issue.

" Great Britian need fear no injury to her trade or her invest-
ments if the Republican party can force the protective tariff as the
main issue in the coming presidential campaign, but if free silver
dominates the American mind and carries at the polls, it will bring
about a change in England that will be ruinous from its suddenness
and severity.

" The damage that can be done British manufactures by a protec-
tive tariff is slight compared to the disasters that would be entailed
by a change from a single gold to a complete bimetallic standard.
It is evident that the Democratic party will not re-nominate a man
who holds to President Cleveland's ideas on money, and the only
hope for the continuation of Mr. Cleveland's financial policy will be
in the success of the Republicans in the next election. The success
of free coinage will bring down the rate of interest on money, and
cause an immediate rise in the price of all commodities. When
silver becomes primary money, the American mines will pour their
products into the mints, and a new era, similar to that produced by
the issue of greenbacks during the civil war, will begin. Gold
will leave the banks and enter into competition with silver in the
avenues of trade, and the manufactories of the United States, which
have been shut down or crippled since 1892, will again resume their
fight for the British markets. It is doubtful if the Republican
party can be held much longer in check by sound money statesmen,
as its adherents are divided by powerful factions. The Democratic
party is also breaking up under free silver agitation. It matters not
to Great Britian which party succeeds if the gold standard is
maintained, but either of the old parties, or a new party, which goes
into power pledged to free coinage will be inimical and prejudicial to
English manufactures and trade. The American people cling with
wonderful tenacity to party organizations, but financial embarrass-
ment and business stagnation has become too severe for their
patience and they are ready for any change that promises relief.
They are becoming convinced that it cannot be found in the
protection theory, as that has been tried, and they are resting now
on Free Silver. When this issue comes fairly before the American
people, England will regret her apathy and adherence to the single
gold standard."

176 BIMETALLISM

SEC. 318. If this country should go to Bimetallism at
a ratio of 16 to 1, and silver on the adoption of Bimetallism
should become worth as much as gold at the ratio fixed,
and the par of exchange between the two metals was
maintained, then, of course, Bimetallism would not hurt
the business interests of the country but would benefit
them by increasing the volume of money, raising prices,
and stimulating business generally. No one disputes, or
can dispute, this proposition. If, however, silver should
go to a discount in gold, there can be no question that
the benefits arising from Bimetallism would be even
greater and more pronounced than they would be if
exchange remained stable at the coinage ratio. Our own
experience with a depreciated paper money, and the
experience of every country now, or recently, using
silver as their standard money, warrants this conclusion.
There is, therefore, nothing to fear from Bimetallism,
nothing to lose, and everything to gain. Let us have
Bimetallism, and let us have it now and without waiting
for the permission or co-operation of any other country.

CHAPTER XX.

MEXICO AND SILVER MONEY.

SEC. 319. In order to ascertain from investigation on
the ground what effect a cheap silver money was having
on the exports and imports of Mexico, on manufacturing
industries, on agriculture, on the wages of wage workers,
and on the general development of the country, I visited
that country in February, 1899, and spent two months in
the investigation of these questions in the City of Mexico
and in other manufacturing centers.

SEC. 320. I have already quoted from the declaration
of the Mexican delegates to the International Monetary
Conference of 1892, their statement showing the increase
of exports other than silver that had taken place in
Mexico between 1873 and 1891. (See Sec. 313). I now
quote from the official reports of the Mexican Government
figures showing the increase of exports since 1891 up to
and including the fiscal year 1897-98. The total exports
in 1897-98 amounted to $128,972,749, of which $61,335,-
647 was for exports other than silver, which shows an
increase of $34,335,647 in seven years, which amounts to
an increase of 127 per cent., an average annual increase
of 18 per cent. The increase in Mexican exports for the
fiscal year 1897-98 over the preceding year was $17,626-
397. If the total period from 1873 and 1898 is taken into
consideration and the total increase from $6,000,000 to
$61,000,000 it shows an increase of 1022 per cent, or an

12

178 BIMETALLISM

average annual increase of more than 40 per cent, for the
intervening 25 years. (See Mexican Trade Review for
February, 1899.)

SEC. 321. The Mexican delegates were unquestionably
correct in their conclusion when they said: " The depre-
ciation of silver as it has appeared to foreign countries
— for in our own country values have not perceptibly
changed — has produced an actual premium on exporta-
tion." Silver is still the money of Mexico. Everything
produced in Mexico is produced on a silver basis, but
they sell their exports for gold. It must be perfectly
apparent that they can sell commodities produced on a
silver basis at a considerable loss on the cost of their
production when measured by silver, and still make an
enormous profit by the 100 per cent premium they obtain
for the gold they receive in exchange for their exported
commodities.

SEC. 322. An article entitled "Mexico Twenty-two
Years Ago and To-day," was published in the Mexican
Trade Review, March, 1899, written by I. Dublan Monte-
sinos, an able Mexican writer. Senor Montesinos, after
quoting figures from the official reports showing the
enormous increase in Mexican exports during that time,
says:

" This increase of our exports is MAINLY DUE TO THE LOW
PRICE OF SILVER IN RECENT YEARS. Contrary to the general
belief abroad, the low price of silver far from being, or having been,
injurious to this country, has, on the contrary, proved a great
beneficial boon, since having at hand as we do, most every kind of
raw materials for manufacturing purposes and paying our labor in
silver, we can now produce at home many articles which but a few
years ago we had to import from abroad paying their price in gold.
The same can be said of all our tropical products. The depression
of the white metal has given them a great impetus, while we reckon
their production in silver, we sell them in foreign markets at gold
figures. * * "

MEXICO AND SILVER MONEY 179

He also says:

" The intellectual progress of a nation is measured by the number
and equipment of its public schools. The education of the Mexican
people is the greatest problem now confronting the Mexican
Government and, therefore, is now receiving from it all due con-
sideration. Thousands of new schools have been opened during the
peaceful period under review and while in 1877 there were only
about 8,000 public schools they number to-day over 20,000 and the
Federal Government as well as those of the different States are
daily increasing the number. The present generation of the
ignorant class of Mexicans may not profit at all from this spreading
of education; but the next generation will take advantage of it and
they will, undoubtedly, be quite different from their fathers who
now earn barely sufficient to meet the first necessities of life, because
of their habitual indolence, lack of ambition and almost complete
ignorance.

" The industrial movement has been very marked during the last
few years. All kinds of factories are springing up throughout the
country ENCOURAGED BY THE LOW PRICE OF SILVER, and the
decided protection given to them by the Government such as the
exemptions from fiscal charges, the admission of machinery,
implements and many raw materials free of customs duty, as well
as the present excellent and prospective home market, not to
mention the hope of many manufacturers who expect to send their
goods to Central and South America, once the projected railroads
now in construction reach the Pacific Ocean.

" Thus, at a glance, can be seen the noted contrast between the
Mexico of today and that of 1877. Surely this country is rapidly
taking her proper place among the civilized nations of the world
and undoubtedly her future is assured."

SEC. 323. When in the City of Mexico I submitted to
the editor of the Mexican Trade Review a series of ques-
tions in writing, which he, in turn, handed to Mr. J. P.
Taylor, one of the best informed men in Mexico on the
economic condition of that country, and an economist of
no mean ability. Mr. Taylor was formerly the editor of
The Trader, published in the City of Mexico. Mr. Taylor
kindly answered my questions in the April number of the

180 BIMETALLISM

Mexican Trade Review. The questions and answers were

as follows:

Question No. 1 — What is the present condition of Mexico —
prosperous or otherwise?

Answer— This is a question which is easily answered. The
present condition of Mexico is decidedly prosperous— prosperous
without precedent in the history of the country. This remark
applies especially to our three great industries: mining, agriculture
and manufacturing. It likewise applies to the national finances.
Four or five years ago Mexico's national expenditure considerably
exceeded her income. Now she has a surplus of income over
expenditure. Four or five years ago Mexican bonds could be easily
purchased at a little more than half their face value. Now they are
above par. Even Mexican State bonds, which no one would touch
a few years ago, can now be placed at their nominal value.

Question No. 2— What is the position of wages now as compared
with 10 or 15 years ago?

Answer— There has been a considerable increase in some districts
and very little or none in others. On the whole, however, it may
be said that wages have increased from 10 to 15 per cent, since 1885.
As a general rule, there is but little skilled labor in the country, and
this commands comparatively high remuneration. Almost invaria-
bly the establishment of enterprises in a given district by foreigners
is followed by an increased rate of wages. Agricultural laborers
earn as low as 37)4 cents in some places and as much as 75 cents in
others, the latter being few and far between. He finds his own
food, but is generally supplied with some sort of house accommoda-
tion. Other laborers earn a higher rate of wages, on the whole —
from 50 to 75 cents per day; in the case of operatives in manufacto-
ries, for instance. It must be remembered that the Mexican
laborer's wants are few and are cheaply and easily supplied.

Question 3— Is there a demand for all available labor?

Answer— There is. Indeed, just now laborers are scarce in many
districts. Naturally every dollar of foreign money brought into the
country has a tendency to increase the demands for labor and to
raise the wages of the laborer. The scarcity of labor in the districts
alluded to is met by the introduction of labor from districts in which
there is a superabundance of it. If labor-saving machinery was
employed to a greater extent— comparatively little of it is used here

MEXICO AND SILVER MONEY 181

now — the labor of the country would be sufficient to meet the
demand for some years to come. Then the laborers themselves,
and this especially applies to the older ones, have little ambition and
are easily satisfied— hence they are not inclined to over-exert them-
selves. The younger ones, however, who receive a smattering of
education in the public schools, are more industrious for the reason
that their wants are greater, and things which were luxuries to
their fathers are necessaries to the children. The efficiency of labor
is, therefore, increasing. Notwithstanding all this, attempts are
now being made to introduce Chinese or Japanese laborers, and one
or two batches of Chinese have already arrived.

Question 4 — What is the purchasing power of silver as compared
with 1873?

Answer — This is a question which cannot be readily answered.
Leaving out of question goods of foreign manufacture— imported
articles — it may be said that the purchasing power of silver has
altered but little since the year named. Increased means of trans-
portation has had a tendency to make things cheaper in many
localities. Other causes have been at work with the same result.

Question 5 — What is the condition of the manufacturing indus-
tries as compared with 1873?

Answer — Mexico had very little manufacturing in 1873. Her
great manufacturing industries have been almost wholly established
since that year if we leave the manufacture of cotton goods out of
consideration, and this has probably trebled during the period
referred to. Our manufacturing industries are now doing remarka-
bly well— netting as a rule from 20 per cent, upwards on the capital
employed.

Question 6— Condition of agriculture as compared with 1873?

Answer— It has vastly improved in every sense, especially
tropical or semi-tropical culture.

Question 7— Business failures?

Answer— These are and always have been remarkably few in
Mexico. The Mexican, from a business standpoint, may be at
times wanting in enterprise, but he pays his debts. He is slow,
often enough, but he is sure. It has often, and more or less truly,
been said that there are more business failures in a comparatively
small city in the United States than in the whole of Mexico.

Question 8— What does the exportation of Mexico amount to?

182 BIMETALLISM

Answer— For the financial year 1897-98 the value of Mexican
exports was $128,972,749, being greater by $17,626,255 than that of
the previous financial year.

Question 9— Would Mexico be benefitted by the adoption of a
gold valuation ?

Answer— I am firmly of opinion that it would not. Explain it as
you will but the fact remains that Mexico's greatest development—
especially in the manufacturing line— dates from the time when
silver commenced to seriously decline in value. Strange as it may
appear at first sight, the question of the appreciation of gold, or the
depreciation of silver — put it as you will— does not appear to con-
cern the great bulk of the Mexican people. Their silver dollar buys
practically as much home products as it did years ago, and they are
content. The rate of exchange causes them no sleepless nights.
With reference to the manufacturing interests it may be said that
the depreciation of silver affords them extra protection, for it has a
tendency to shut out foreign manufactures which have to be paid
for in gold. The same thing largely applies to the tropical agricul-
turist. He pays his wages in silver and sells his product for gold.
This is likewise true of the copper and gold mine-owner.

No doubt the fact that the Government had to pay the interest on
its foreign debt in gold was a serious drawback— if not menace — to
the country some few years ago, but now Mexico bears the burden
with the greatest ease. Our great railways, too, were seriously
affected in more ways than one by the depreciation in silver, for
they had to pay interest on the bonds, etc., in gold. In fact they
and some other foreign companies operating in Mexico were placed
in a similar predicament to that of the Government. Local traffic—
the most remunerative of all, in on*e sense — was, however, largely
stimulated for reasons already mentioned, and our railways are year
by year gradually increasing, not only their gross receipts but their
net earnings as well.

On the whole it may be said that Mexico is perfectly satisfied
with her silver standard and evinces no disposition to change it.
All that is asked is that the rate of exchange should be steady, for
fluctuations in exchange are very detrimental to importers and others.

Whether the silver standard would be a good thing for another
country I do not know— It certainly seems advantageous for Mexico.
The thing which was once thought to be a curse has turned out a
blessing. J. p. TAYLOR.

MEXICO AND SILVER MONEY 183

SEC. 324. I reproduce a part of an interview had
with Senor Rafael Reyes Spindola, the editor and pro-
prietor of El Mundo, the leading Spanish paper of the
republic of Mexico. This interview was had about the
first of February, 1899, with Senor Spindola by a reporter
of the New Orleans Picayune, and was originally pub-
lished in the Picayune and afterwards republished in the
Mexican Herald. I quote from the Mexican Herald of
February 14, 1899, Senor Spindola said:

" Silver has been the prosperity of the republic of Mexico," said
Senor Rafael Reyes Spindola, the editor and proprietor of "El
Mundo," the leading Spanish newspaper of that republic, who is a
guest of the St. Charles for the carnival season. " The Mexican
Government will never think of going to a gold basis. If all the
silver production in the world should cease, yet Mexico could con-
tinue to do it with profit. This is possible not only on account of
the cheapness of labor, but by the help of the mining laws."

" Do you consider that a silver standard would be of like benefit
to the United States?" asked the " Picayune " reporter.

" From a Mexican standpoint I would say that the United States
would be infinitely better with a silver standard. It would be the
best way for American industries to secure the trade from Europe.
With a silver standard, from pole to pole, America could control the
European markets and be the absolute master of the trade situation
of the world. All the South American republics would then trade
with the United States; they would not buy a pin, even, of Europe
under those conditions.

"The Mexican army formerly numbered 30,000 men," said he,
"while today the army only numbers 18,000 men. Instead of
bearing arms, these men have gone out of the army onto the
plantations, into the fields, into the mines, working and developing
the country. That is what we are doing with our standing army—
developing the soil, the mines, the rivers and harbors. That
reduces the expense of the Government fully one-half.

" Fifteen years ago the Mexican debt had no standing at all in
the foreign markets— it was not even quoted. Today the same
bonds in London and Berlin are at par and the credit of the country
is excellent.

184 BIMETALLISM

" The deficit of the Government was formerly between eight and
nine millions of dollars. Now there is a surplus of twenty millions
of dollars, after paying off all the coupons on the foreign and
internal debt.

"The Government budget twenty years ago was drawn for
twenty millions of dollars; today that budget calls for fifty-two
millions, which proves very conclusively the increase in the export
and import trade of the country.

" Railroads— twenty years ago Mexico had only 500 miles of
railroad; today there are 17,000 miles of railroad in constant opera-
tion, most of which receives a subsidy from the Government. One
noted exception, however, is the Mexican International.

" The Minister of Communications has made great improvement
in bringing about a consolidation and connection of all the Federal
telegraph lines, and in this way has succeeded in establishing
meteorological observatories all over the country, which are run in
connection with the weather bureau and are proving of inestimable
value to the farmers, who, through this service, receive warning of
cold snaps and temperatures which would damage their crops.

" In the Department of Justice and Public Instruction there has
been a wonderful development in the increasing of schools, which
increase has amounted to 1,000 per cent., or about ten times over
what they were ten years ago. Public instruction in Mexico is
enforced by all the Federal authorities. That is, the education of
the lower class of citizens, including the original Indians."

" ' Do you think the United States should acquire control of the
Philippines?'"

" In my opinion, the Philippine Islands would give the United
States more trouble by far thans^they would benefit her. The
insurgents will always give trouble. They will fight forever and
will never submit to American domination."

SEC. 325. The advantages which Mexico derives from
a silver standard are very clearly and forcibly shown in
an editorial published in El Mundo of February 10, 1899,
from which I quote the following:

We have always maintained, and tried to prove on several
occasions, that the fall in the value of silver is the cause of the
unprecedented growth and prosperity of those countries using it as a
national currency.

MEXICO AND SILVER MONEY 185

Our contention was based upon solid reasoning and a mass of
important facts. The depreciation in the value of silver is a premium
on exportation, and, consequently, on the products of silver coun-
tries. With silver at par, effects worth a dollar gold abroad are
worth a dollar silver to the exporter; but if silver falls, the exporter
receives the same dollar, in gold, or a dollar and a half, two dollars,
or more, as the case may be, in silver. Hence the establishment of
new industries, the culture of new crops, the exportation of addi-
tional products and on a greater scale; hence, also, the immigration
of capital and labor, the increase of public revenue, and, in short,
prosperity in every sense.

The facts which corroborate this contention are public and noto-
rious, and in Asia, Africa, and nearly the whole of Latin America,
both exportation and production have increased to such an extent as
to alarm those old countries which adhere to the gold standard, and
seriously jeopardize the industrial monopoly of the old world.

Time has added another striking proof of the correctness of this
reasoning and the facts deduced, a proof which should be analyzed
in order to disillusionize a number of people of the idea that the
country would be better off on a gold footing and that everything
possible should be done to raise the white metal from the state of
decay into which it has fallen.

This new fact tends to show that the enormous prosperity
enjoyed by certain countries having a silver or paper currency, has
been interrupted and daily threatened with destruction in proportion
as the premium on gold has decreased. Following the advice of the
monometallists, Chile and the Argentine have made an effort to
raise the value of the national paper currency to the level of gold.
With this object in view loans have been floated for the purpose of
retiring paper from circulation, and returning little by little to the
gold standard. This monetary policy has resulted in the premium
on gold decreasing, and it is believed that in time a permanent gold
currency can be established.

We give below a narrative of the disastrous results which these
measures have produced in the Argentine Republic, according to a
letter written by the Argentine economist, Silvio Gesell, to " The
European Economist: "

"Naturally, this rise in the value of the national monetary unit,
is offset by a general fall in all prices, and it is curious and at the
same time sad to observe how all the bimetallistic theories concern-
ing the fall in prices, are here fully confirmed.

186 BIMETALLISM

" Everything declines. Intelligent artisans emigrate, whilst
immigration, which reached the figure of 15,000 persons per annum,
has dwindled to almost nothing. The most extraordinary industrial
competition prevails. The supply in all branches of trade exceeds
the demand, whilst nobody thinks of starting new industries.
Fiscal returns of all kinds are decreasing 'TO AN ALARMING
EXTENT,' and this pitiful state of the public revenue only faintly
reflects the general economic state of affairs.

" The same monetary policy has been followed in Chile, with the
same result, with this difference, that as the methods employed have
been more vigorous, things have reached a pass there (July, 1898)
which we shall reach in a year or two, namely, the "Krack."
Last month a state of things was reached in Chile, where all
exchange and all remuneration for work became materially
impossible, and the Government was compelled, by the force of
circumstances, to again put into circulation, at a single stroke, all
the paper which it had patiently and at such enormous sacrifices,
retired during the last few years."

The Republic of Chile, after having decided to adopt the gold
standard on February 11, 1895, and having in January, 1898,
recommenced payment in specie, has suddenly been compelled to
suspend monetary reform, in view of the economic confusion, as
unfortunate as unforeseen, brought about by the retirement of the
depreciated coin from circulation.

The foregoing gloomy picture contrasts strongly with the flourish-
ing economic and financial situation of this country. Neither
capital nor labor is emigrating from Mexico; indeed, the contrary is
the case, and both are flowing into the country en masse sure of
remunerative returns. Mexico is the scene of no industrial strikes,
nor has she to limit her products; on the contrary, new factories are
springing up and new lands are being brought under cultivation.
Mexico knows no decrease in her revenues, no deficits in her
budgets and no waning credit, but a surplus on hand, State values
almost at par and solvency complete. The monetary horizon,
gloomy in Chile and the Argentine, is bright in this Republic, all
because we have refused to be seduced and hurried along by perni-
cious innovations; we have known how to preserve our monetary
system and turn the premium on gold to account in developing our
own manufactures.

Fortunately there are no longer any visionary partisans of the

MEXICO AND SILVER MONEY 187

gold standard in the country nor illusions with respect to the
advantages of a pound sterling currency; but should the occasion
arise, we shall confront all deluded persons with the examples of
Chile and the Argentine, both as a lesson and a warning.

SEC. 326. I quote from the Mexican Herald of January
17, 1899, the following paragraph:

"The great activity noticeable here in the installation of new
cotton mill machinery, many of the older mills replacing their plant,
is a most gratifying sign of these prosperous times. Quite a
number of mills are compelled by the increase of business to enlarge
their premises. And this is in a country committed to the fatal
silver basis, a 'poor miserable country' which pays gold interest
on its six per cent, bonds, and sees them standing at par and far
ahead of the securities of other Latin-American nations which have
adopted the prosperity-evoking gold standard. Mexico offers to the
world the spectacle of a daily refutation of closet theories of finance,
a busy and progressive nation which meddles with no other country,
is content with its imperial domain, its vast variety of resources,
and best of all, earnestly desires peace."

SEC. 327. Senor Don Matias Romero, for many years
Ambassador Extraordinary and Minister Plenipotentiary
from Mexico to the United States, in 1898 published a
book entitled "Mexico and the United States," on page
570 of which he quotes with approval an extract from a
book published in 1897 by the "Mexican Central Rail-
way Company Bureau of Information," entitled "Facts
and Figures about Mexico." I reproduce this quotaton
which is in the following words:

" Causes of Prosperity— While Mexico's prosperity is unquestion-
ably due to a large number of causes, prominent among which are
the suppression of disorder, the extension of railroads, and the
liberal policy of the Government to foreign capitalists, it is very
evident that her industrial growth has been powerfully stimulated
by the existing monetary standard.

" When silver and gold, as valued in the world's commodities,
parted company, and Mexican dollars (which were being exported
to Europe) were sold for a less price as measured in the currency of

188 BIMETALLISM

the gold standard countries, a rise in the price of all imported
articles began in Mexico. From this time dates the development of
Mexico's cotton and woollen industries, as well as the increase in
the exportation of articles other than precious metals. The demand
and the margin of profits for made-made goods increased as
Mexican dollars depreciated. The native manufacturer enlarged
his operations, introduced improved machinery, and began to
compete successfully with many grades of imported goods.

"The consumer now purchases from the Mexican manufacturer
at the same price in silver as when silver was at a par with gold,
instead of being exported to Europe, as formerly. Many millions of
dollars have thus been kept at home and added to the capital of the
country.

" Cotton mills have been constructed in all parts of the Republic.
The acreage of cotton is constantly increasing, but the native crop
is not yet sufficient to supply the demand, and large quantities of
cotton are imported from the United States.

" The history of the woollen trade has been almost identical with
that of cotton.

" The Mexican manufacturer of woollens produces now a very
good article, although he cannot yet compete with the finer fabrics of
France and England. In former years there was a considerable
exportation of wool to the United States; now there is a considera-
ble importation of it from the United States into Mexico.

"While it is true that that the Mexican dollar, as measured in
francs, marks, or pounds sterling, has decreased in value nearly 50
per cent., it is also true that prices of almost every class of foreign
goods have also decreased 50 per cent. A suit of clothes made
from the finest quality of imported- goods costs only the same
number of Mexican silver dollars to-day that it cost twenty-five
years ago.

"Note also the effect on real estate. Coffee plantations have
risen in value from $75 or $80 an acre, the price when gold was at
par with silver, to from $200 to $800 an acre. The annual profits
of these plantations have risen from $10 or $15 an acre to from $50
to $150 an acre. Similar advances are true also in sugar and
tobacco haciendas.

" The premium on gold has been the cause of immense internal
improvements throughout the country. The capital kept at home
has been invested in irrigation schemes, in improving large tracts
of fallow land, and in other enterprises of a like character. The

MEXICO AND SILVER MONEY 189

premium has also brought much foreign capital here, which has
been invested in various branches of industry, particularly in the
production of articles for exportation.

" The foreign investor doubles his capital when he brings it to
Mexico. He gets the advantage of cheap and docile labor for silver,
and sells his exported products for gold.

" This great stimulation to all industrial enterprises, the building
of railroads, the establishment of factories, and the cultivation of
thousands of acres of land— all these have had a notable effect upon
the people. The great demand for labor has benefitted them
immensely, and has promoted peace and prosperity throughout the
country.

" The resources and opportunities of Mexico have only been
recently revealed to her own people, as well as to foreigners. It is
much easier now than it ever was before to get capital here at a
relatively low rate of interest for any legitimate enterprise, because,
first, there is more money in the country than when we were
importing so largely; and because, secondly, the business man is
willing, under present conditions, to take risks which would be con-
sidered too great in an era of low prices and a contracted currency.

" The native producer has prospered under silver at the expense
of the foreign merchant and of the importer. Silver in Mexico has
stimulated exports and contracted imports."

SEC. 328. I also quote from Romero's book, page 528,
a paragraph on Mexican wages and silver which is in
the following words:

"MEXICAN WAGES AND SILVER — The impression generally
prevails in this country that Mexican wages are reduced to one-half
of their old amount in consequence of the depreciation of silver,
reasoning that if wages were twenty-five cents a day, for instance,
when silver was on a par with gold at the ratio of 16 to 1, now that
it has declined about 100 per cent.,* wages of twenty-five cents in
silver are equivalent to twelve and a half cents in gold, and that
wages not having increased in the same proportion that silver has
depreciated, the result must be that they have been reduced one-
half. This is a mistaken conclusion. In an article which I

* The words " 100 per cent." are unquestionably a typographical error or a slip
the pen, as 50 per cent., or one-half, was unquestionably meant.— A. J. U

190 BIMETALLISM

published in the "North American Review," of June, 1895, I
explained the results of the silver standard in Mexico, and showed
that the purchasing power of the silver dollar remains there the
same as it was when silver was on a par with gold, in so far as
Mexican commodities and services are concerned, and that prices
have only increased somewhat for imported articles, or for such
Mexican products as have their prices regulated in foreign markets.
I refer, therefore, the reader to that article, which will be found in
this volume, and here I will only say that WITHIN THE BOUNDA-
RIES OF MEXICO THERE HAS BEEN NO SUCH THING AS A
DEPRECIATION OF SILVER, AS SILVER HAS MAINTAINED ITS OLD
LEVEL WITH REGARD TO COMMODITIES. IT PURCHASES AS
MUCH NOW AS IT DID BEFORE ITS DECLINE IN VALUE RELATIVE
TO GOLD BEGAN. It pays for as much labor as before, and in the
hands of the laborer it purchases as much of the necessaries of life.
It is only in connection with imports that the premium on gold or
the decline in silver has caused an advance in price. But the
laboring population purchases little that is imported, and so whether
imported goods cost more or not is of little or no consequence to
persons of that class. In many cases even the price of imported
articles has not enhanced, notwithstanding the depreciation of
silver.

" Very many believe that the low rate of wages in Mexico is due
to the depreciation of silver, and those professing this opinion are
very much mistaken, because when, thirty years ago, silver was at
a par and even at a premium with gold at a ratio of 16 to 1, the
wages in Mexico were lower than they are now, and the Mexican
laborer was not so well off as he is today.

"To make a proper investigation about the condition of the
Mexican laborers in connection with the money standard, it would
be necessary to extend that investigation to gold countries such as
Spain, Italy, Germany, Turkey, etc., etc., so as to see to what
extent the money standard affects the prosperity of the working
classes. I think that the standacd of money has very little to do
with the condition of labor. The silver standard has nothing to do
with their reward; they would earn no more, in proportion, were the
country on a gold basis. In fact, tens of thousands of them would
be out of employment by reason of the impossibility of competing
with the workers of gold standard countries.

" Under the operation of the gold standard farm labor received three
times as much in one part of the Union as it did in another part, as is

MEXICO AND SILVER MONEY 191

shown by the above quoted publication of the Agricultural Depart-
ment, entitled, ' Wages of Farm Labor in the United States.' The
fact that wages in each State were ascertained by averages, shows
that the difference between the best-paid labor and the poorest-paid
labor is still greater. That report also shows that in the United States
Caucasian farm labor receives more than three times as much as
the same labor receives in Germany, although both countries have a
gold standard and a protective tariff. (See Special Consular Report
18% entitled ' Money and Prices in Foreign Countries,' p. 263.)

" Between 1816 and 1834 England had a gold standard and the
United States a double standard, with silver as the money in com-
mon use, and laboring men were better off here than in England.
Turkey is one of the gold standard nations, and Japan, until
recently, coined silver at a ratio almost identical to that of the
United States, and yet the progress of Japan was really remarkable.
All this shows that silver is not the cause of the low wages of
Mexico."

SEC. 329. I will make one more quotation from
Romero on the question of wages. I quote from the
same book, page 521:

" It is a fact that wages in Mexico are far lower in many instances
than those paid for the same industries in the United States,
although sometimes, that is, in the case of skilled laborers, they are
as high or higher; but this ought not to appear strange when it is
considered that this country pays probably the highest wages in the
world; not even the foremost manufacturing nations of Europe, as
England, France, Germany, and Belgium, being equal in this
regard. Yet while it is true that labor in European countries is not
so well remunerated as in the United States, it must be taken into
account that the same amount of labor produces there less than
here. I am assured by competent persons that a bank-bill printer,
for instance, does not print in England more than 1,000 sheets per
week, while the average work done by the American workman is
6,000 sheets per week; and it is stated in the " Journal des Econo-
mistes " that a French weaver can take care of only four looms,
a Belgian of five, an English weaver of six, and one from this
country of eight, while a Mexican weaver cannot attend to more
than two looms. But the actual production during a given working
time is in Mexico far less than in the United States, or even in
Europe.

192 BIMETALLISM

"The day's work of a Mexican laborer, very likely, represents
in many cases only one-fourth of what is accomplished during the
same time by a laborer in the United States. A Mexican laborer
working from ten to eleven hours a day, for instance, accomplishes
less work, or produces less, than a European or an American laborer
in seven or nine hours, and in some instances the disproportion is as
great as one to five. I have been assured that a Mexican bricklayer
in eleven hours' work does not lay more than 500 bricks, while a
bricklayer in the United States lays 2500 in nine hours. Under
such conditions the high wages of $3 a day paid in the United States
are no higher than the wages of 50 cents paid in Mexico, so far as
the product of labor is concerned."

SEC. 330. Thomas T. Crittenden, Consul General
from the United States to Mexico, in his Consular Report
written in 1896 and issued from the Bureau of Statistics,
Department of State, Washington, D. C., 1896, Volume
XIII. Part 1 (I quote from pages 143, 144, and 145), said:

"Wages of unskilled labor has been almost unaffected by the
premium on gold. The great stimulation of all enterprises, the
building of thousands of miles of railroads, the establishment of
numerous factories, and the bringing under cultivation of thousands
of acres of land, has given employment to vast numbers of men.
This, of course, has had its effect in raising wages and bettering
the condition of the laboring classes, at the same time reducing the
revolutionary spirit that heretofore had great sway in this country.
It has been a most difficult matter to make this roving class of
people, by whom this country is largely populated, think and believe
that prosperity and plenty only come with peace; now that they
understand, with but few exceptions they are thoroughly contented."

SEC. 331. Mr. Crittenden, after explaining the diffi-
culties he had labored under in obtaining reliable informa-
tion as to the prices of many commodities as far back as
1873, says:

" However, it is a fact that the price of eatables and produce
raised here and consumed by the natives, such as 'frijoles,' 'tortillas'
and 'chiles,' as well as the cheap 'manta' (common shirting), hats
and zarapes, have not changed. Their value has in no way been

MEXICO AND SILVER MONEY 193

affected by the rise and fall of silver. * * As to imported
luxuries and fineries, they are, when the difference in the price of
silver is taken into consideration, more expensive now than in 1873.
However, the consumption and use of imported articles is limited
almost entirely to the rich and traveled natives and foreigners."

SEC. 332. Consul General Crittenden while in Kansas
City, Missouri, in May, 1895, in an interview published
in the Star of that city, May 2, 1895, stated that the
purchasing power of silver money in Mexico was as great
or very nearly as great as the purchasing power of gold
in the United States. I quote from "Mexico and the
United States, "page 529:

" Such a condition exists," he said, " but the explanation is yet to
be found. The Mexican dollar is worth about 52 cents in American
money, but I can buy just as good gloves for $1.50, Mexican money,
in Old Mexico, as I can buy anywhere in America for $1.50, Ameri-
can money. On one of my trips here I wore a very good suit of
clothes, made to order in a very satisfactory manner, which cost me
just $12 in the Mexican capital. You can get an elegant suit of
clothes made to order there, in the best style, for $35, Mexican
money. Shoes that cost $5 a pair here, bring $3 a pair there, no
matter whether they were made in Paris or in Mexico. A very
large proportion of the shoes sold in that country come from France.
They seem to be as good as ours, although I do not like the fit
quite so well, and I usually buy my shoes here. What seems
remarkable to me is that goods of American manufacture sell for
less in Mexico than in the United States. My wife does most of the
buying and from her I learn that she can buy the finest silk under-
wear— she bought some for me recently — for 25 per cent, less in
Mexico than in this country. I understand, too, that the Jaeger
underwear is much cheaper there than in American cities. I don't
pretend to account for it. The goods are made in New York and
they pay a high duty, certainly not less than 25 percent, ad valorem,
in the Mexican port of entry.

" My wife gets the finest Irish linen for fifty cents a yard in Old
Mexico. In fact, we buy everything in the clothing line, except
shoes, in Mexico, in preference to buying here, as goods are so
much cheaper there.

194 BIMETALLISM

" The Mexicans are very fond of jewelry, and get it very much
cheaper than we do. There are jewely stores in the City of Mexico
finer than any that I ever saw in an American city. Last winter
one of the Lucases of St. Louis— James Lucas, I believe— made a
trip around the world, and finally reached the City of Mexico. His
daughter was with him. While in Paris the young woman saw a
very fine gold watch, which she wanted. The price there was
$225 in American money, and her father decided not to buy it.
When they reached Mexico she saw an exact duplicate of the watch
she had seen in Paris, and again asked her father to buy it. They
inquired the price and found it was $225 in Mexican money, or
just half the price asked by the Parisian jeweler. Mr. Lucas
offered his check and referred the jeweler to me. Now why such a
piece of jewelry should be sold in Mexico for half the price asked in
Paris, I don't know, nor can I explain why American-made goods
should sell for less there than in St. Louis or Kansas City, but it
is a fact."

SEC. 333. The key for the solution of this mystery
will be found in "Trusts" and "Protective Tariffs."
Trusts, syndicates and combines now control the produc-
tion of more than three hundred articles of every day
use, articles of absolute necessity, extending from the
cradle in which the infant child is lulled to sleep to the
coffin which receives the remains of the gray haired man
when life's journey is over. Many of these trusts are
international, embracing the entire Western World.
(For a partial list of trusts, at least those in existence in
1894, and the articles controlled by them see Appendix
to "Wealth vs. Commonwealth," a very excellent book
by Henry D. Lloyd, published by Harper & Brothers
in 1894).

SEC. 334. The price we are required to pay for articles
so controlled has no economic significance whatever,
it is not regulated by the ordinary course of the law
of supply and demand, but by the arbitrary will of the
men who control the trust. And when trusts are aided

MEXICO AND SILVER MONEY 195

by a so-called "protective tariff" which virtually
prevents the introduction of foreign goods in competition
with goods produced by the trust they become omnipotent.
They increase or diminish the output at pleasure, and in
fixing the price of the commodity so produced and so
protected, the greed of the trust and the necessities of the
people are the controlling elements. The cost of produc-
tion does not enter into the calculation. If the supply is
greater than the demand at the price fixed the production
ceases until the necessities of the people compel them to
purchase at the price demanded.

SEC. 335. When the revenue laws are of such a
character as to virtually prevent the importation of
foreign goods in competition with those produced by a
trust, the trust can fix any price it pleases and the people
must submit no matter how extortionate. But when a
trust sends its goods to a foreign country it must there
compete with foreign producers. While at home it may
with impunity rob consumers, it must in foreign countries
sell at a fair price. This explains how certain com-
modities produced in the United States can be sent to
Mexico and, after paying an import duty to the Mexican
Government, commissions to agents, freight charges, etc.,
etc., sell the goods in Mexico for one-half of the price
demanded and received in this country.

SEC. 336. There is no diversity of opinion in Mexico
on the silver question. During my investigation in
Mexico I interviewed, probably, not less than one
hundred prominent men among whom were Government
officials, railroad officials, merchants, manufacturers,
bankers, coffee planters, cotton planters, newspaper men,
lawyers, doctors, hotel proprietors, etc., etc., and I found
but one gold standard advocate and he was not a Mexican
but an American now employed in a clerical position in

196 BIMETALLISM

the City of Mexico. I will not say that there is not a
Mexican in the Republic that favors a gold standard but
I will say that after diligent search for two months I
failed to find one. All the talk in this country about the
probability of Mexico adopting a gold standard has no
foundation in fact whatever. It is universally believed
in Mexico that the present wonderful development of the
country and the general prosperity of the people is largely
owing to their abundant cheap silver money and they
have no intention of adopting a gold standard.

SEC. 337. While in the City of Mexico I had a con-
versation with the president of a prominent bank in that
city and after he had declared in very positive terms his
belief that Mexico owed her present prosperity very
largely to her abundant and cheap silver money and that
it would be suicidal for Mexico to adopt a gold standard,
I expressed my surprise to hear such a declaration from
the president of a bank, as bank officials in the United
States were almost without exception gold standard
advocates. He replied that banking in Mexico is quite
different from banking in the United States; that
loaning money and discounting bills is not the exclusive
business of a Mexican banker; that the Mexican banker
is also an investor; that many of the banks in Mexico
are largely interested in manufacturing and other indus-
tries, and like other business men are interested in the
general development of the gountry and that consequently
they were ready and- willing to favor a financial policy
that would produce the best results for the country and for
the people generally. He said that Mexico did not want
a gold standard, that so long as she could produce on a
silver basis and sell her exports whether manufactured
articles, or agricultural or mineral products for gold and in
so doing pocket the premium on the gold, she would
remain satisfied with the present financial situation.

MEXICO AND SILVER MONEY 197

SEC. 338. Romero in his recent publication herein-
before quoted from (page 576) in discussing the monetary
situation in Mexico, says:

" Everybody in Mexico, that is, from the educated to the ignorant,
from the rich to the poor, from the natives to the foreigners, and
even the bankers, who in other countries are decidedly favorable to
the gold standard, are all in favor of silver. The Government
holds the same opinion. As Mexico is now prosperous a large
portion of the people attribute its prosperity to the silver standard,
and are therefore decidedly favorable to the continuance of that
standard.

" It is not strange that Mexicans think so when prominent and
able foreigners living there hold the same opinion.

" Mr. Lionel E. G. Garden, the very able British Consul at the
City of Mexico, who has been in Mexico for nearly eighteen years
and understands the country well, has expressed official views on
this subject which go much further than my own. He holds that,
while the first effects of the depreciation of silver on the Mexican
Government and on the Mexican railroads were unfavorable, the
ultimate result will be beneficial and will tend to increase the
country's agricultural resources and consequently the republic's
export trade, provided that a price shall be arrived at not subject to
fluctuations; and that the greatest disadvantages that the Mexican
Government and railways suffer from the depreciation are therefore
the constant fluctuations in the market price of silver. Mr.
Garden's views appear in a report on the effect of the depreciation
of silver in Mexico, addressed to Lord Rosebery on August 4, 1893.

" Mr. Garden in a later report to the Foreign Office on the trade
of Mexico in 1895 attributes to the depreciation of silver the
expansion of that trade and of the general prosperity of the country
as follows:

" 'This favorable condition of things must be attributed in greaj
measure to the stimulus afforded to the development of the agri-
cultural resources of the country by the depreciation of silver, which,
far from being prejudicial, has proved to be the greatest benefit to
Mexico, as I predicted it would in my report on that subject of
August, 1893.'"

198 BIMETALLISM

SEC. 339. While in Mexico 1 had a very interesting
interview with Mr. Garden and he explained to me why
there had been so little rise in Mexico in the price of
imported goods. Mr. Garden said:

" I have been Consul for Great Britain in Mexico for sixteen
years, and I have made a careful study of the conditions prevailing
during that time. The silver money now in use in Mexico will go
as far in support of the family of the laborer as it would when gold
and silver were of equal value at the coinage ratio for all com-
modities produced in Mexico. Imported articles cost more but not
so much more as would naturally be supposed. There are two
reasons for this: (1) Most articles now imported from gold standard
countries have fallen in value in those countries (either from
improved methods of production or from some other cause), and (2)
Import duties being paid in silver actually amount (as measured by
gold) to but one-half what they did before. For example, suppose
we imported a commodity costing $100, and that the duty was $80;
formerly the duty being paid in gold, or in silver of equal value, the
cost of the commodity, exclusive of transportation, laid down in
Mexico would be $180. Now the same commodity can in all
probability be purchased in Europe or the United States for two-
thirds the former price, say $66. The duty still remains $80, but
this being paid in silver, which is now worth as measured by gold
but fifty cents on the dollar, the import duty would amount to $40
only, gold valuation, instead of $80 as formerly. This $40 duty
being added to the $66 cost we find that the commodity formerly
costing $180, now costs but $106, and consequently can be sold for
silver at a slight advance only on the former cost. Some imported
goods are sold in Mexico today for less silver money than they
formerly brought in gold, but most imported goods when measured
by silver are somewhat higher than formerly.

" Labor is well employed. There is work for all that want work.
Employers are seeking laborers, not laborers seeking employment.
Wages have not advanced materially since I have been in Mexico,
•except in special localities and for special work, such as railway
construction, etc. The special localities I refer to are mostly in the
hot country where labor has always been more highly paid. The
great increase in the cultivation of tropical products has caused an
increase in the demand for laborers and a consequent increase
in wage."

MEXICO AND SILVER MONEY 199

SEC. 341. During my conversation with Mr. Garden
and in illustration of the statement that even imported
goods could be purchased in Mexico for the same, or for
nearly the same, amount of the so-called depreciated silver
money, as was formerly paid when gold and silver were
of equal value at the coinage ratio, Mr. Garden asked me
what the shoes I was then wearing cost me in the United
States. I had on a pair of congress gaiters that I pur-
chased in Los Angeles for which I paid five dollars and I
so informed him. Mr. Garden had on a pair of gaiters
very similar in appearance. Placing his foot alongside of
mine he said: " What do you suppose I paid for these
gaiters? They were made in France, were imported to
this country and I purchased them in this city and paid
for them with Mexican silver money." I answered that
I presumed that he paid about ten dollars. He replied
that he paid just four Mexican silver dollars for them, and
that four dollars was the ordinary retail price in Mexico
for such shoes, and " I think," said he, " they are as good
as yours."

SEC. 342. In support of Mr. Romero's statement that
even the bankers in Mexico are loyal to the cause of silver,
1 quote a paragraph from an editorial in the Mexican
Herald of November 4, 1897, entitled " Mexican Bankers
and Silver:"

"Why are our great bankers so loyal to the cause of silver?
Why are they not gold monometallists as are the bankers of
England, the United States, and the continent of Europe? It is
because they are not merely bankers; they are heavy investors and
directors in new manufacturing industries dependent for their
prosperity on the continued use of silver as money in this country
They take a broader view of the currency situation than do bankers
abroad, because they are factors in the great manufacturing
movement, which has for its ultimate purpose the achievement of
Mexico's industrial independence. Being something more than the

200 BIMETALLISM

lenders of money, they are liberal in their ideas and are not blinded
by prejudice. They can see all sides of the currency question.
There are many able and sagacious men among the bankers of
Mexico and they are, with hardly an exception, bimetallists. They
are not trying to make money dear, they are not wrecking
properties — rather are creating industries."

SEC. 343. I quote from The Trader (a Mexican monthly
journal) May number, 1898, the following paragraph:

"Mr. John W. Grant, president of the Traders' Bank at
Evansville, Indiana, after returning home from his recent visit to this
republic, said: ' Everything is prosperous in Mexico, and after five
years of crop failures and a constant decline in silver, the money of
the country, I can say positively that there is no financial trouble
anywhere and no failures in business worth mentioning; the
Government met the interest on the national debt, all the shops are
full of customers, and every one from the highest in the land down
to the lowest, is full of admiration and love for President Diaz.'
Such an admission from a banker must be very galling to those
savants who have been so zealously advocating the gold standard
for the United States, using as premises the false representations of
the newspapers of that country concerning conditions here."

SEC. 344. In an interview with Gabriel Morton, Vice-
President Mexican National Railroad, Mr. Morton said:

" I have been in Mexico seven years. This country is in a
prosperous condition and is being rapidly developed. Manufactories
are being established all over the country, and generally are being
run to their utmost capacity, and are making money. The
condition of the skilled workman has been greatly improved. He is
receiving better wages, and now has constant employment, at least
an opportunity for constant employment. There is a constant
demand for all available workmen. In this country it is the
employer seeking the workman, not the laborer seeking employ-
ment, as in some other countries.

" Question— You say, Mr. Morton, that the skilled workman is
receiving better wages than formerly? Is he not being paid in
depreciated silver money worth only 50 cents on the dollar?

"Answer— He receives his pay in Mexican silver dollars, but
whether those silver dollars are depreciated or not depends upon

MEXICO AND SILVER MONEY 201

what you measure them with. It is true that the silver that he
receives, if exchanged for gold, would only buy about one-half the
quantity of gold it formerly would buy, but if exchanged for
"frijoles," "tortillas" and "chiles," upon which he lives, and for
the cheap " manta " and " sarapes " with which he clothes himself,
it has not depreciated. It will buy as much of the necessaries of
Mexican life as it ever would. It is true that the prices of imported
commodities are higher in this country than they were twenty or
twenty-five years ago, but the rise in price of imported goods does
not affect the ordinary laborer, for he does not buy imported goods.
There have been considerable fluctuations in the price of corn,
beans, peas, etc., the ordinary diet of the poorer class of Mexicans,
since I have resided in Mexico, but such fluctuations have been
occasioned by short or abundant crops, and in no sense have they
been influenced by the divergence between the commodity values
of gold and silver.

"Question — Do you think Mexico would be benefitted by a gold
standard?

" Answer — I do not. I think such a step would be an economic
blunder that would be fatal to industrial advancement in the repub-
lic. Mexico is today the most prosperous country in the world, all
things considered. It is being more rapidly developed, more rail-
roads are being built, more manufactories established, more
improvements of all kinds are being made proportionately,
especially when we take into consideration the previous conditions
of its people, than in any other country in the world. Japan has
tried the gold standard experiment, and it has resulted in checking
materially her industrial progress."

SEC. 345. While in Mexico I had an interview with
Mr. Vail, managing editor of the Two Republics, in which
Mr. Vail said:

"The present industrial condition in Mexico is eminently satis-
factory. Wages as compared with wages paid ten or fifteen years
ago have advanced considerably. There is now a demand for all
available labor. In certain parts of the republic Chinese and Japa-
nese laborers are being imported owing to a shortage of farm labor.
Silver money in Mexico will buy as much of domestic goods as it
ever would. Some classes of imported goods are higher than
formerly but not very much higher. Manufacturing industries are

202 BIMETALLISM

in a high state of prosperity. Business of all kinds is good and
business failures are almost unknown. Exports are steadily and
rapidly increasing. The general impression among business men
and Government officials is that Mexico would be injured by a gold
standard. The high price of gold has encouraged exports and
discouraged imports. This " has stimulated the establishment of
manufacturing industries and encouraged agriculture, especially the
production of such commodities as can be exported and sold in gold
standard countries. In fact Mexico enjoys a gold valuation on a
silver basis."

SEC. 346. Mr. Purdy, manager for R. G. Dun & Co.
in the Republic of Mexico informed me that: " Business
failures in the sense of the parties going into bankruptcy
and quitting business very seldom occur in Mexico, in
fact that the proportion is so small comparing them with
failures in the United States as to induce one to almost
say there are practically none."

Mr. Purdy also said: " I have no hesitation in saying
that a gold standard would not do for Mexico, at least not
at present. If Mexico should adopt a gold standard it
would close her factories and paralyze her industries
generally."

SEC. 347. Mr. Hegewisch, senior partner in the firm
of Hegewisch, Fuss & Co., exporters of grain and other
Mexican products and a member of the Mexican Con-
gress, said:

•" Mexico is at present very prosperous, no difference of opinion
on this subject. Farm wages nearly the same as they have always
been, highest on coffee and tobacco plantations. Higher also in
manufacturing centers. There is a demand for all available labor,
demand increasing yearly. Problem source of supply. Silver
purchases as much today as it ever did, excepting of course
imported articles. Home manufactures increasing so much that
the working classes need not buy imported articles. In the way of
food or clothing, good cheap substitutes are provided in this
country. Manufacturing industries of all kinds prosperous. But
few existed fifteen or twenty years ago. Agriculture is prosperous

MEXICO AND SILVER MONEY 203

and is far more varied at present than it was fifteen or twenty years
ago. Many agricultural products are exported, such as coffee,
tobacco, grain, etc., which twenty years ago were hardly sufficient
for home ^consumption. Failures are seldom heard of. Sharp
competition as exists elsewhere is not as yet an element likely to
bring about failures. Speculation as understood in the United
States is unknown here. Exports show a marked increase yearly.
Mexico would be ruined if it were to go to a gold standard."

SEC. 348. In an interview with J. M. Fowler had in
Los Angeles, California, in January, 1899, Mr. Fowler
said:

" I was in Mexico for the purpose of locating a tract of land for
American investors. I was in the republic about eight months and
went over most of the tropical portion of Mexico — the country south
of the City of Mexico.

" The people are generally prosperous. I do not believe there is a
man in the Republic of Mexico that could not get work at any time
that he desired to work. The range of wages for farm labor is from
30 cents to $1 per day. One dollar to $1.50 is paid for railroad
building. The 30-cent laborers are Indians. In some parts of the
republic Indians receive as high as $1 per day.

" Mexico is improving very rapidly. In the last ten or fifteen
years there has been a wonderful development in manufacturing
industries.

" I do not think the purchasing power of silver has declined in
Mexico, at least so far as Mexican products are concerned. Tailors
in Mexico claim that they can make as good a suit of clothes today
for $25 in silver money as they could make twenty-five years ago
for $25 in gold. Silver will go as far in the payment of freight or
fare on railroads as it ever would. The people are prosperous, con-
tented and happy. When I say the people are prosperous I do not
mean to be understood as including the Indians. The Indian is sat-
isfied when he has enough to eat, as a rule he has no ambition and
never accumulates much property; there are some exceptions but
generally he will not work if he has a week's provisions in stock.

" Take the country as a whole, Mexico is in a very prosperous
condition. There are more improvements of all kinds going on in
Mexico today and property is advancing more rapidly in value than
at any other time in the history of that country. This rapid growth

204 BIMETALLISM

and general prosperity is usually attributed by the Mexican people to
their abundance of cheap silver money, and in this I think they are
right."

SEC. 349. In an interview with Mr. E. G. Ord, Mr.
Ord said:

" During the year 1898 I was Master Mechanic in a tinware
manufactory in Monterey, Mexico. It is a large establishment
employing 300 or 400 men. Wages paid unskilled workmen
averaged about one dollar per day.

" Mexico is in a very prosperous condition. Monterey is a city
containing about 60,000 inhabitants and is an important manu-
facturing center. Twenty years ago it was a small town of 4,000
or 5,000 people. There is no difference in opinion in Mexico on the
silver question. It is universally believed by the people that the
abundance of cheap money in Mexico has been the principal cause
of the wonderful growth and development of the country.

" Everything produced in Mexico is produced on a silver basis,
and when exported and sold for gold, the premium received on the
gold is sufficient in itself to stimulate production to its utmost
limits.

" Silver in Mexico has not depreciated. It will buy as much" now
as it ever would. The divergence between gold and silver, at least
so far as Mexico is concerned has not been caused by a depreciation
in silver but by the appreciation of gold.

" The wages paid for Mexican labor is much better than it was
twenty or twenty-five years ago, and it stands to reason that if the
laborer receives more money and the money received has the same
purchasing power dollar for dollar now that it formerly had that
the laborer's condition has been improved."

SEC. 350. Interview with Senor Lie. L. F. J. Austin,
March 16, 1899:

" Senor Austin said: ' I am a resident of Mexico. I have resided
in the republic for fifteen years. I am interested in as part owner,
in fact principal owner, of a coffee plantation in the State of Oaxaca,
in this republic. We employ a large number of men on the coffee
plantation. We pay our men 50 cents per day. Wages are much
higher than they were fifteen, ten, or even five years ago, and are
constantly rising as the demand for labor increases. Wages in

MEXICO AND SILVER MONEY 205

certain localities are 100 per cent., and even more than 100 per cent.
higher than they were ten or fifteen years ago; in other localities
they have not advanced so much, but it is a conservative estimate
to say that the wage of the laborer, upon the average, the whole
republic taken together, has advanced at least 25 per cent, within
the past fifteen years.

" ' Imported goods, at least certain classes of imported goods, are
some higher, but not very much higher, than they were fifteen years
ago, but Mexican commodities, especially such as are consumed by
the poorer classes, are no higher, when measured by silver, than
they were then. Of course there has been fluctuation in the value
of Mexican commodities caused by short or abundant crops.'
[After referring to statistics Mr. Austin continued as follows]:
' For instance, beans per load of 300 ft>s. in January, 1889, could be
purchased on the market for $7.00. In September, 1892, they were
worth $22.00, and in June and July, 1895, only $7.00. Corn in
January, 1889, was worth $4.60 per load; in September, 1892,
$10.00; and in July, 1895, $5.00. Wheat in January, 1889, was
worth $11.00 per load; in April and May, 1894, $13.50; and in
December, 1895, $11.00. These fluctuations in price, however, had
no connection whatever with the relative value of gold and silver,
but were caused by short or abundant crops.

" ' The silver money received by the laborer now will go as far in
supporting himself and family as the silver received by him when
gold and silver were of equal value at the coinage ratio. The
divergence between gold and silver, at least so far as Mexico is
concerned, has been caused by a rise in the value of gold, not by a
fall in the value of silver. Silver will buy the same or nearly the
same quantity of Mexican product now that it would in 1873, while
gold will buy twice as much as it would in 1873. Hence it
necessarily follows that it is gold and not silver that has changed
in purchasing power. This is certainly true so far, at least, as this
country is concerned.

" 'Again, the so-called depression in the value of silver, but which
in fact, is an appreciation of gold, operates as a bounty on exports.
Commodities which could not be produced in this country for export
when gold and silver were of equal value at their coinage ratio, can
now be exported at a profit. Everything here is produced on a
silver basis. Coffee, for instance, can be produced in this
country and exported to Europe or the United States and sold at a

206 BIMETALLISM

loss on the cost of production of 10, 15 or 20 per cent, and the expor-
ter will be reimbursed by the premium of 100 per cent, on the gold
received in payment, leaving him a very handsome profit. The
Mexican coffee planter wants nothing better than this. He is satis-
fied with the present financial situation.

" ' Mexico at the present time is more prosperous and is being more
rapidly developed than at any other time in her history. Railroads
are being built all over the republic, areas of land heretofore uncul-
tivated are being improved and brought under cultivation. There is
a demand for all the labor that can be obtained. Such a thing as an
unemployed willing worker in Mexico is unknown. The people are
prosperous, contented and happy and are perfectly satisfied with the
present financial situation.' "

SEC. 351. While in Mexico I had an interview with
General C. H. M. y Agramonte, a prominent lawyer of
the City of Mexico and proprietor of the Anglo-American,
who said:

"Mexico at the present time is in a very flourishing condition.
The wage of the wage-worker is much better than formerly. In
my opinion wages have advanced 25 or 30 per cent, within the past
fifteen or twenty years. There is a demand for all available labor.
No man in Mexico need be unemployed. The purchasing power of
silver money is as great today in Mexico as it ever was so far as
Mexican commodities are concerned. It will go as far in the hands
of the laborer in purchasing the necessaries of life as it would when
gold and silver were at par at the coinage ratio.

" Some classes of imported goods are higher than they were, but
are not very much higher. The general fall in prices in gold
standard countries and the saving we make in import duties
by paying such duties with money the gold valuation of
which is but 50 cents on the dollar has prevented the rise of
imported goods very much above their former level. Manufacturing
industries are immeasurably better off than they were twenty years
ago. In fact almost all of the manufacturing industries of this
country have been established within the last twenty years. The
manufacturing industries are in a very prosperous condition and are
paying handsome dividends. Everything produced in Mexico is
produced on a silver basis and when exported is sold for gold, and
manufactured goods or agricultural products produced for export

MEXICO AND SILVER MONEY 207

can be shipped to Europe or the United States and sold at a loss of
25 per cent, on the cost of production and transportation, and the
exporter will be reimbursed and a handsome profit secured by the
premium of 100 per cent, obtained on the gold he receives in
exchange for his exports.

"Thus encouraged there has been a wonderful development in
agriculture. Hundreds of thousands of acres of land have been
opened up to cultivation within the past twenty years, and a large
export trade has been built up. Business failures are almost
unknown in Mexico. Exports are steadily and rapidly increasing.
Much of Mexico's prosperity dates from the time that a serious
divergence between gold and silver manifested itself, and as this
divergence between the metals increased the development of
Mexico and her general prosperity increased. Mexico does not
need a gold standard. There seems to be no disposition on the
part of the people, or of the Government, to make any change in
our monetary system."

SEC. 352. Romero on page 594 of "Mexico and the
United States," says:

" A change from the silver to the gold standard would cause in
Mexico general ruin, as we do not yet produce gold enough to
base our currency on that metal, and as our export of commodities
is not yet sufficiently large to allow us to buy all the gold we need
for that purpose."

SEC. 353. He also says, see page 596:

"The silver standard encourages very materially, so long as
other leading commercial nations have the single gold standard, the
increase of exports of domestic products, because the expenses of
.producing them, land, wages, rent, taxes, etc., are paid in silver,
and therefore their cost, as compared with their market value, is
considerably less than that of similar articles produced or raised in
single gold standard countries. When sold in gold markets, there-
fore, they bring very profitable prices, as they are converted into
silver at a high rate of exchange. These conditions have caused a
great development in the exportation of some of our agricultural
products, because they yield very large profits; coffee, for instance
which costs on an average about ten cents a pound to produce it, all
expenses included, has been sold at about twenty cents in gold in

208 BIMETALLISM

foreign markets. The export of other agricultural products which
did not pay when gold and silver were at par, that is at the ratio of
16 to 1, is now remunerative, because there is returned to us in
exchange more than we lose in the gold price of the article. The
same is the result of some agricultural products that we could not
export before because their price in foreign markets was not remu-
nerative. Such is the case, for instance, with beans, which at eight
cents would not pay when gold and silver were at par, but now that
eight cents in gold make about sixteen cents in silver, it is a profit-
able price."

SEC. 354. He also says, see page 597:

" The silver standard is a great stimulus to the development of
home manufactures, because foreign commodities have to be paid
for in gold, and, owing to the high rate of exchange, their prices are
so high that it pays well to manufacture some of them at home, our
low wages also contributing to this result."

SEC. 355. He also says, see page 602:

" Our silver standard encourages the investment in Mexico of
capital from rich countries having the gold standard, since every
gold dollar when sent to Mexico is converted into two silver dollars,
at the present rate of exchange, and, when invested in lands, wages
and other expenses for the raising of agricultural products which are
sold for gold in foreign markets, like coffee, the proceeds are so
large that they constitute a very great inducement for the invest-
ment of capital."

SEC. 356. I quote a few paragraphs from the leading
financial journals of Japan and Chile for the purpose of
contrasting the unhappy and distressed condition of Japan
and Chile under a gold standard with the prosperous
condition of Mexico under a silver standard and ask the
reader to determine for himself which is the better system.

JAPAN.

SEC. 357. The effects produced in Japan by the
adoption of the gold standard in that country have not
been beneficial. The Fiji Shimpo, one of the important
papers of the Empire, in reviewing the year 1897, says:

" The adoption of the gold standard is the worst mistake ever
committed by the Government in the long history of the thirty
years that have passed since the present Meiji era began. The
Matsukata ministry, however, must bear the full responsibility for
it. The prospect which the country had of still further developing
her industries owing to the depreciation of silver compared with
gold has now been ruthlessly thrown away. Our trade with silver-
using countries has already been greatly injured. In China, Corea
and the Strait Settlement, where at one time Japanese products
found a good market and were rapidly expelling foreign goods,
Japan is now losing ground and is likely soon to have little footing
left. Many of the factories in the western part of Japan are
closing or only running on half time."

SEC. 358. The Greater Japan, in its review of the
year 1897, says:

"We can speak only in gloomy terms of the year just past.
Commercial affairs and political affairs reached their lowest depths
of depression and mismanagement. The introduction of the gold
standard proved a complete failure. It was to have opened the door
to an inflow of foreign capital, thus succoring the distress of the
industrial classes and producing an appreciation in the price of
public securities. But foreign capital has not come in, neither have
public securities appreciated. On the contrary, we have seen an
ever-increasing preponderance on the side of imports, a correspond-
ing outflow of specie, and a steady fall in the price of bonds. Nor
is this all. The effect of the demonetization of silver has been fatal
to the most promising of all Japan's industrial enterprises— cotton
spinning. Its chief market has been closed against it, and the
prosperity that distinguished it at the close of 1896 was replaced by
adversity at the end of 1897."

CHILE.

SEC. 359. I quote from "Mexico and the United
States " page 587, the following account of the effects of
a gold standard on the industrial and financial condition
of Chile:

" According to a well-informed financial paper of Chile, ' La
Tribuna de Valparaiso,' the adoption of the gold standard in
that country, some two years ago, has not given satisfactory
results. In point of fact, it is asserted that since the former
financial policy was discarded and gold has become the only circu-
lating medium, poverty and a paralyzation of business seems to
have fallen to the lot of many districts that heretofore were very
flourishing. There is a noticeable scarcity of circulating medium all
over the country, public and private securities have depreciated, and
the rate of interest which some years ago was 7 or 8 per cent, is
now as high as 12 per cent. Furthermore, since the gold standard
was introduced, five banks, with an aggregated capital of $3,300,-
000, have failed, and three, with a capital amounting to $12,300,000,
have gone into liquidation. Thus it is said that 25 per cent, of the
money invested in banking in that country has been lost, and a
similar result has obtained with regard to many mining and indus-
trial enterprises which heretofore had been in a most flourishing
condition."

SEC. 360. Only a few years since conditions in
Japan and Chile were almost as encouraging as those in
Mexico today (see sec. 315) but those countries, influ-
enced by the blandishments of gold standard advocates,
forsook the silver standard under which their development
and prosperity was attained and undertook to copy after
the English gold standard. The result of their experiment
is shown in the foregoing paragraphs from their leading
financial papers.

MEXICO AND SILVER MONEY 211

SEC. 361. In contrast with the deplorable conditions
now existing in Japan and Chile resulting from attempt-
ing to establish a gold standard in those countries we find
a wave of prosperity sweeping over Mexico, (who still
remains loyal to silver), from center to circumference.
Not only is her prosperity co-extensive with the republic,
but her credit in foreign countries and with foreign inves-
tors was never better, in fact never before so good, as at
present.

SEC. 362. Upon July 12, 1899, the United States of
Mexico offered for sale by subscription, through the bank-
ing houses of J. P. Morgan & Co., New York; J. S. Mor-
gan & Co. of London, England, and the Deutsche Bank
of Berlin, $110,095,000 of bonds, to be known as the Five
Per Cent. Consolidated Loan of 1899, issued for the pur-
pose of taking up all previous loans and to represent the
entire external indebtedness of the Government; the
principal and interest to be payable in gold, and free of
all Mexican taxes, present or future; the bonds to be in
coupon form, of the following denominations — $97.00,
$485.00, $970.00,$2,425.00, and $4,850.00, United States
gold coin, present weight and fineness, interest payable
quarterly, upon the first day of January, April, July and
October, the entire issue to be retired within forty-five
years. The issue was over-subscribed the first day
upon which the books were opened.

SEC. 363. An Associated Press dispatch dated City
of Mexico, December 2, 1899, published in the Los
Angeles Herald December 3, 1899, shows that the
remarkable prosperity of Mexico is still on the upward
grade. I reproduce this dispatch, which is in the follow-
ing words :

City of Mexico, Dec. 2.— A remarkable and most gratifying
statement has been sent to congress by Finance Minister Limantour

212 BIMETALLISM

and will be received with interest by all bondholders, for it
shows the marvelous improved condition of the Mexican treasury,
which is now able, so ample are the revenues, to propose to
congress a reduction of the federal taxes. The cash revenue for
the fiscal year ended June last was $60,022,349, wholly derived
from the usual and normal sources, and much in excess of the
finance minister's estimate, most conservatively made, while the
returns for five months of the present fiscal year show an increase
over last year. In view of this prosperous condition of Mexico's
revenues, Minister Limantour sends several bills to congress of
great importance. Some $4,000,000 are appropriated for public
works of prime necessity, including new school houses in the federal
district, new postoffice buildings here and at Vera Cruz and other
edifices. The Government further proposes to purchase some out-
standing silver bonds, bearing 6 per cent interest and will also
abolish export taxes on coffee, which will be a boon to the coffee
growers. It will, in addition, reduce several internal revenue taxes,
notably those on bank checks, life insurance policies and the tax
imposed on new companies according to the amount of their capital,
and other reforms welcomed by the public.

The Government has now a cash surplus of many millions of
dollars, and is amply able to carry out its reforms, as revenues from
all sources show a natural and gratifying increase.

SEC. 364. The industrial situation in Mexico to-day
is similar to that prevailing in the United States immedi-
ately after the close of the Civil War, say from 1865 to
1873. Everybody has money. Property is advancing in
value. Business enterprises of all kinds are prosperous.
Failures are almost unknown. New industries are being
established and old ones developed and enlarged. Mr.
Morton of the Mexican National Railroad did not over-
estimate the condition of things in Mexico when he said:
"Mexico is today the most prosperous country in the
world all things considered. It is being more rapidly
developed, more railroads are being built, more manu-
factories established, more improvements of all kinds are
being made, proportionately, especialy when we take

MEXICO AND SILVER MONEY 213

into consideration the previous condition of its people,
than in any other country in the world."

SEC. 365. The principal cause of this wonderful
development in our sister republic is the abundance of
cheap silver money, just as an abundance of cheap
money in the United States from 1865 to 1873 promoted
an industrial boom in this country. During that period
there was more general prosperity among the people in
the United States, a more rapid accumulation of wealth,
and a more equitable distribution of the wealth created,
than at any other time in the history of this country, and
Mexico under similar conditions is enjoying a similar
wave of prosperity.

APPENDIX.

" BIMETALLISM " — BY A. J. UTLEY, IN " THE ARENA." JUNE 6, 18%.

SEC. 366. In the discussion of the money question
that is now agitating the people throughout the length
and breadth of the land, the advocates of gold mono-
metallism insist that we should have money that has
" intrinsic value;" that the material on which the money
stamp is placed should possess an intrinsic value equal to
the money value stamped upon it; that gold possesses
this property and that silver does not, and for this reason
they favor a single gold standard.

SEC. 367. Are the premises true? Has gold intrinsic
value? If the premises are not true, if gold has no
intrinsic value, then some other reason must be assigned
for monometallism.

The word intrinsic means internal, inherent, not
apparent or accidental, opposed to extrinsic.

Now the fact is, gold has no intrinsic value whatever.
All commodities have certain inherent or intrinsic proper-
ties which tend to make the particular commodity more
or less desirable, and to the extent that such properties
influence the desire for their possession, such inherent
properties may enhance their value or ratio of exchange,
but value itself is independent of and extrinsic from all
commodities.

SEC. 368. If value were intrinsic, if it were inherent
in a thing, it could not change or fluctuate. If the value
of gold or silver were inherent in the metal, the same
quantity of metal of the same degree of fineness would
always be of the same value. In 1873, 371^ grains of
pure silver were worth as much in all the markets ef the
world as 23.2 grains of pure gold. Now they are worth

APPENDIX 215

only about one-half as much. Is it possible that the
intrinsic value of one or both of these metals has changed
since 1873? Certainly not. The intrinsic properties of
gold and silver are the same now as they were in 1873, as
they always have been; but their relative values, when
uncontrolled by legislation, are subject to great fluctua-
tions.

SEC. 369. Value is a relative term and is necessarily
extrinsic. Value is created and controlled by the law of
supply and demand. The inherent or intrinsic properties
of a thing may be of such a character as to limit the
supply and by limiting the supply may enhance the
value; or extrinsic circumstances may increase the
demand and by so doing enhance the value; but value
always and under all circumstances is determined by the
law of supply and demand.

SEC. 370. But what say the authorities on this ques-
tion? Condillac, a celebrated French economist, says:

" The value of a thing is founded on the want of it, or the demand
for it. Therefore, if the want is more strongly felt, it gives the thing
a greater value; if the want is less felt, it gives it a less value. The
value of a thing increases with its scarcity and decreases with Its
abundance. It may even on account of abundance decrease to
nothing. A superfluity, for example, will have no value, if we can
make no use of it."

SEC. 371. Professor Gide, another French economist,
says:

" Value, then, which is the dominating idea of all political econ-
omy, denotes nothing more than a fact which, in itself, is very
simple, the fact that a thing is more or less desired. Were the word
French, we should only have to say that value is desirability. Since
value arises from desire it proceeds from us rather than from things;
as we say nowadays, it is subjective far more than objective. It is
not attached to objects which can be perceived; it is born at the
moment when desire awakes, and vanishes when it dies out. Like
a butterfly, desire flutters from thing to thing, and value abides only
where desire rests."

SEC. 372. Aristotle defined value as follows:
" Value is not a quality of an object, but an affection of the mind.
The sole origin, source, or cause of value is human desire. When
there is a demand for things they have value; when the demand
increases (the supply remaining the same) the value increases;
when the demand decreases the value decreases. When the demand
altogether ceases, the value is altogether gone."

216 BIMETALLISM

SEC. 373. Professor Perry, in his work on Political
Economy, says:

" A sudden change in the fashion will frequency take away at a
stroke one-half the value of goods that were fashionable but are so
no longer. The matter is all there and the form of the matter is all
there, but the value is one-half escaped. It is clear that there is no
inherent quality called value in anything. Value is the relation of
mutual purchase established between two services by their exchange.
Value starts in desire, gives birth to efforts, proceeds by estimates,
and ends in satisfactions."

SEC. 374. Senator Jones, in his great speech delivered
in the United States Senate in October, 1893, said:

" Qualities may be said to be inherent in objects, but value being
a conception of the mind cannot be intrinsic or inherent. If value
were intrinsic, if it resided in an article, it could not be taken
from it, and it could not be changed by changes in the number of
objects of which value is asserted, or with modifications in the
desires of men to become possessed of such articles. Qualities that
are inherent do not vary with the shifting degrees of estimation in
which they are held by mankind. Hardness in a stone, gravity in
lead, do not suffer either augmentation or diminution by reason of
any increase or reduction of the appreciation of men. If value were
intrinsic in articles it would remain intrinsic whether people wanted
them or not. But things can have no economic properties by and
of themselves; those properties exist only because there are people.
A thing can have no use unless some one wants to use it; it can
have no value unless, in addition to being wanted, some one is will-
ing to incur sacrifice to obtain it."

SEC. 375. Professor Macleod, an eminent English
economist, says:

" Value, like distance or equation, requires two objects. We
cannot speak of absolute or intrinsic distance or equality. Single
objects cannot be distant or equal. If we are told that an object is
distant, or equal, we immediately ask — distant from what? or
equal to what? So it is equally clear that a single object cannot
have value. We must always ask— value in what? And it is
clear that as it is absurd to speak of a single object having absolute
or intrinsic distance, or having absolute or intrinsic equality, so it is
equally absurd to speak of an object having absolute or intrinsic
value."

SEC. 376. Barbon, an able writer on economics, who
lived about two hundred years ago, said:

" Value is only the price of things; that can never be certain,
because to be certain it must at all times and in all places be of the
same value; therefore nothing can have intrinsic value. But

APPENDIX 217

things have an intrinsic virtue in themselves, which in all places
have the same virtue: as the lodestone to attract iron, and the
several qualities which belong to herbs and drugs. But these
things though they may have great virtue may be of small value or
no price according to the place where they are plenty or scarce.
Things have no value in themselves: it is opinion and fashion
brings them into use and gives them values."

SEC. 377. The International Cyclopedia, published
in Boston in 1894, defines value as follows:

" Value, in political economy, is one of those terms that demand
attention more for the clearing away of its application to vague and
fallacious uses than for an attempt to give it a strict scientific
definition. It has a distinct meaning only when it is used as
' value in exchange ' and between things coexisting in time and
place. Two articles each of which will bring $25 in Boston are
equivalent in value there. Cost has nothing to do with value.
If a bale of silk costs $500, and if from disease of the silk-worm the
price of the commodity rises so that it will bring $750, that is its
value; so also if there be a fall in price so that it will only bring
$375, that is its value."

SEC. 378. Professor Jevons, in his work on Political
Economy, says:

"A student of economics has no hope of ever being clear and
correct in his ideas of the science if he thinks of value as at all a
thing or an object or even as anything which lies in a thing or
object. Persons are thus led to speak of such a nonentity as
intrinsic value. There are doubtless qualities inherent in such a
substance as gold or iron which influence its value; but the word
value, so far as it can be correctly used, merely expresses the
circumstance of its exchanging in a certain ratio for some other
substance.

" Value in exchange expresses nothing but a ratio, and the term
should not be used in any other sense. To speak simply of the
value of an ounce of gold is as absurd as to speak of the ratio of the
number seventeen. What is the ratio of the number seventeen ?
The question admits of no answer, for there must be another
number named in order to make a ratio; and the ratio will differ
according to the number suggested."

SEC. 379. In a work entitled "Money and Mechan-
ism of Exchange," Professor Jevons says:

" It has been usual to call the value of the metal contained in
coin the intrinsic value in the coin; but this use of the word
intrinsic is likely to give rise to fallacious notions concerning value,
which is never an intrinsic property or existence, but merely a
circumstance or external relation."

218 BIMETALLISM

SEC. 380. There are certain properties in gold that
make it desirable for certain uses independent of legisla-
tion, but gold derives its chief value from the fact that
by virtue of law a certain quantity of it may be coined
into a dollar and when so coined the dollar is a legal
tender and lawful money. If the demand for it as a
money metal is increased (as it would be by the demone-
tization of silver), its value will be increased; while, on
the other hand, if gold should be demonetized its value
would almost entirely disappear. The stock of gold now
in use as money amounts to something more than
$3,500,000,000. There is enough in stock to supply the
demand for use in the arts for seventy years. The
artisan will not pay much for material that must be kept
in stock seventy years before consumption. It is safe to
say that if gold should be demonetized, if the fictitious
value given it by law should be taken from it, 23.2 grains
of gold would not bring ten cents in the markets of the
world; that 90 per cent of the present value of gold is
fictitious and caused solely by legislation.

SEC. 381. I have devoted considerable space to the
discussion of the phrase "intrinsic value," because it
has been so long and persistently asserted by the money
kings, and especially by the gold monometallists, that
gold has "intrinsic value," that it is a "standard of
value" and a "measure of value," that many people
who have made no special study of economics have been
and are deceived, and because no man can understand
the true character and function of money until he realizes
the fact that there is no intrinsic value in anything. On
account of the importance of a correct understanding of
the meaning of the word value I was not content with a
simple statement of the fact that value is a relative term,
and could not be intrinsic or inherent in anything; but I
have introduced authorities that prove beyond the possi-
bility of a doubt that there is no intrinsic value in the
so-called precious metals, and that, consequently, the
plea for gold money on account of its supposed intrinsic
value is fallacious.

SEC. 382. It is claimed by the gold standard men that

APPENDIX 219

if we restore to silver its ancient right of free and
unlimited coinage the United States would become the
dumping-ground of all the cheap silver in the world.

If the United States should restore to silver its ancient
right of free and unlimited coinage there would be no
cbeap silver in the world. The reason why silver is
worth less (measured by gold) now than it -was in 1873
is because and only because of adverse legislation; and
when the laws that discriminate against silver are
repealed, silver will resume its ancient place at the ratio
existing prior to such adverse legislation.

SEC. 383. Men tell us that you cannot legislate value
into a thing nor out of a thing, but that value is controlled
by the inexorable law of supply and demand. Now,
while it is true that value is controlled by the law of
supply and demand, it is also true that anything which
tends to increase the demand for a thing (the supply
remaining the same) must necessarily enhance its value;
and if the legislative demand is for the total supply,
and if the legislative demand fixes a price at which the
total supply will be received, it necessarily follows that
the value of the commodity so fixed cannot fall below the
price fixed. It might rise temporarily slightly above the
legislative limit, but it could not by any possibility fall
below it.

In order, however, to have this effect, the legislative
demand must be for the total available supply. The
reason why the Bland Bill or th^ Sherman Act did not
restore silver to its ancient place as a money metal, at
the ratio previously existing between gold and silver, was
because the demand was not for the total available
supply; and an act to coin the American product, if such
an act should be passed, would fail for the same reason.

SEC. 384. That legislation does influence values is
not only self-evident, it is historic. When the Bland Bill
was passed in 1878 (which provided for the coinage of
not less than $2,000,000 worth of silver per month) it
created a demand for silver bullion that did not exist prior
to its passage, and by reason of this increased demand,
caused solely by legislation, silver rapidly advanced in

220 BIMETALLISM

value in all the markets of the world. Again, in 1890,
on the adoption of the Sherman Act, under the provisions
of which the United States became the purchaser of four
million five hundred thousand ounces of silver per month
silver bullion rose in value in a few days from 94 cents
per ounce to $1.20 per ounce, not only in the United
States, but also in Europe. And when legislation was
adverse to silver in India in 1893, silver fell almost as
much in value in twenty-four hours. In view of all
these facts can there be any doubt that legislation did, in
the instances named, affect the value of silver bullion?

If silver had free and unlimited coinage at the ratio of
16 to 1 in the United States, silver bullion in this country
would be worth $1.29 per ounce. No one disputes this
proposition; it is self-evident. What would it be worth
in London, Paris, or Berlin? If the coinage were free
and unlimited in the United States and there were no
demand in Europe or Asia for this European bullion, it
would be worth the mint price in the United States, less
the cost of transportation to the United States; there can
be no question about it.

SEC. 385. Professor Jevons, in his " Theory of Politi-
cal Economy," published in 1879, page 137, says:

"The ratio of equivalent weights of silver and gold, which had
never before risen much above 16 to 1, commenced to rise in 1874,
and was at one time (July, 1876) as high as 22.5 to 1 in the London
markets. Though it has since fallen, the ratio continues to be
subject to frequent considerable oscillations. The great production
of silver in Nevada may contribute somewhat to this extraordinary
result, but the principal cause must be the suspension of the French
law of the double standard and the demonetization of silver in
Germany, Scandinavia, and elsewhere."

Professor Jevons says the principal cause of the diver-
gence in the ratio between gold and silver was the
"suspension of the French law of the double standard
and the demonetization of silver in Germany, Scandinavia
and elsewhere."

1 propose to show that the only cause of the divergence
between the metals was the adverse silver legislation in the
United States and elsewhere, and that the great produc-
tion of silver in Nevada had nothing to do with it.

APPENDIX 221

SEC. 386. Professor Laughlin, in his work on Politi-
cal Economy, publishes a chart by which he shows that
the value of the world's production of gold from 1493 to
1850 was $3,314,550,000, and the value of the silver
produced during the same time was $7,358,450,000, or
more than twice as much in value of silver as of gold.
From the same chart it appears that the value of gold
produced from 1850 to 1885 was $4,425,525,000, and that
the value of the silver produced during the same time
was $2,397,475,000, only a little more than one-half as
much in value of silver as of gold. During the first
period named the ratio between gold and silver was much
lower than during the second period. If the amount of
the production had a controlling influence or any influence
over the value of the bullion, the reverse of this would
have been true.

SEC. 387. If the legislative demand is for the total
available supply of both gold and silver at a certain ratio,
it necessarily follows that, while the value of the metals
may fluctuate as compared with commodities, the ratio
between the metals will remain unchanged. Of course
there will be slight fluctuations arising from local causes.
While neither of the metals can fall below the coinage
value, either of them may temporarily rise above it on
account of some local demand. If silver should rise in
value the ratio would fall. If gold should rise in value
the ratio would rise. But as soon as the local demand was
satisfied the former ratio would be restored. If the rise or
fall in either of the metals was general, caused by an
abundant yield of the mines or from any other reason, so
long as free and unlimited coinage was guaranteed to both
metals the metal changing in value would carry the other
with it.

In proof of the above proposition, I need only cite the
facts shown by Professor Jevons, that the value of gold
fell 46 per cent, between 1798 and 1809, and that from
1808 to 1849 it appreciated 145 per cent.

In 1798 the commercial ratio between gold and silver
was 15.59 to 1, in 1809 it was 15.96 to 1, and in the
meantime gold had fallen in value 46 per cent. If gold

222 BIMETALLISM

had not carried silver down with it, the ratio between gold
and silver in 1809 would have been 8.42 to 1. The ratio
between gold and silver in 1809 was, as we have seen,
15.96 to 1, in 1849 it was 15.78 to 1, only a trifling fluct-
uation, but in the meantime gold had appreciated in value
145 per cent In 1809 15.96 pounds of silver were equal
in value to one pound of gold, in 1849 gold had appreciated
145 per cent., and if it had not carried silver up with it, it
would have taken, in 1849, 39.68 pounds of silver to buy
one pound of gold. But, as a matter of fact, the ratio
between gold and silver in 1849 was 15.78, a trifle lower
than before the appreciation of gold. Is it not conclusively
established from the above facts that a general rise or fall
in the value of either of the metals will carry the other
with it as long as free and unlimited coinage is guar-
anteed to both? and is it not necessarily true that the mass
of both metals combined would be less liable to serious fluctu-
ation in value than either standing alone would be?

SEC. 388. Is it not also conclusively established from
the foregoing facts that legislation can, by creating a
demand for the total available supply of an article at a
fixed price, prevent the article from falling below the
price fixed, and that when the legislative demand is for
the total available supply of two metals such as gold and
silver, to be used for a common purpose, and a ratio is
established at which the total supply will be received, the
ratio so fixed between the metals will remain substantially
invariable? The metals may rise or fall in value as mea-
sured by commodities, but they cannot change in value
as measured by each other, except only such slight varia-
tions as may be produced by excessive local demands for
either of the metals, and such slight variations will be
temporary only.

SEC. 389. That legislation may establish and main-
tain any ratio between gold and silver, so long as they
both have free and unlimited coinage, and that the ratio
established by the country producing the greatest amount
or able to control the greatest amount of bullion of either
of the metals will have a controlling influence, is a fact
well authenticated by history.

APPENDIX 223

The Encyclopedia Britannica, Vol. 22, page 73, says:

" In Spain, by the edict of Medina (1497), the ratio was 10^.
When America was first plundered the first fruits were gold, not
silver; whereupon Spain, in 1546, and before the wealth of the
silver mines of Potosi was known, raised the value of gold to 13>3,
and, as Spain then monopolized the supply of the precious metals,
the rest of the world was obliged to acquiesce in her valuation.
During the following century Portugal obtained such immense
quantities of gold from the East Indies, Japan, and Brazil, that the
value of her imports of this metal exceeded £3,000,000 a year,
whilst those of Spain had dwindled to £500,000 in gold, and had
only increased to ,£2,500,000 in silver. Portugal now governed the
ratio, and in 1688 raised the value of gold to 16 times that of silver.
Except during a brief period of forty years this ratio has ever since
been maintained in Spanish and British America and the United
States. A century later the spoils of the Orient were exhausted,
the Brazilian placers began to decline, and Portugal lost her
importance. Spain thus again got control of the ratio, and, as her
colonial produce was chiefly silver, she raised its value in 1775 from
one-sixteenth to one-fifteenth and a half that of gold for the
Peninsula, permitting it to remain at one-sixteenth in the colonies.
France, whose previous ratio (that of 1726) was 14^> adopted the
Spanish ratio of 15^ in 1785, and has adhered to it ever since.
These three historical ratios, and the bearing of each upon the
others, have influenced all legislation on the subject, and, where
there was no legislation, have governed the bullion market for
more than two centuries."

From the foregoing historical account of the ratio
between gold and silver it appears that any nation pro-
ducing the greatest amount of the precious metals has
always been able to control the ratio and fix the relative
values of the metals.

SEC. 390. When Spain made her gold discoveries in
America and obtained a considerable supply of this metal
and anticipated still larger gold discoveries, she became
master of the situation and at one stroke of the pen arbi-
trarily raised the value of gold from 10^ to 1 to 13^ to
1, and "the rest of the world was obliged to acquiesce in her
valuation." Why? Because she controlled the supply.

A century afterward, the little kingdom of Portugal, not
one-quarter as large as the State of California', and at
that time not producing one-tenth of the wealth now
produced in California, was able to come to the front and
dictate to the world what the ratio should be between
gold and silver, simply because at that time she was

224 BIMETALLISM

producing more gold than any other nation in the world.
She exercised her prerogative as the greatest gold pro-
ducer, and arbitrarily raised the value of gold from 13>3
to 1 to 16 to 1, and the rest of the world was obliged to
acquiesce in her valuation.

A century later, the mines theretofore controlled by Por-
tugal having become exhausted, "Portugal lost her import-
ance," and Spain, then being a heavy producer of silver,
again got control of the ratio and raised the value of
silver, or reduced that of gold, which amounts to the
same thing, from 16 to 1 to 15^ to 1, which ratio has
remained the European ratio since that time (1775). It
also appears from the historical account quoted from the
Britannica that the metal of which there was the greatest
production was always the one that was increased in
value.

From the above and foregoing is it not conclusively
shown that the relative value of gold and silver, so long
as they have free and unlimited coinage, is not influenced
in the slightest degree by the amount of bullion that may
be produced of either of the metals? In the instances
given by Laughlin when the greatest production was
silver, silver was more valuable when measured by gold;
and when the greatest production was gold, then gold
was more valuable when measured by silver. And in
the instances cited in the Britannica it was the metal of
which there was the greatest production that was
increased in value in every instance. It is the law and
not the amount of the production that fixes and maintains
the relative value of the metals.

SEC. 391. What are the facts to-day as to the produc-
tion of silver, and where is it being produced?

The report of the Director of the Mint dated June 24,
1894, shows the world's production of silver for the year
1893, rated at the ratio of 16 to 1, amounted to $208,371,-
000. Of this amount the United States produced $77,-
575,700, and Mexico produced $57,375,600. The amount
produced in the United States and Mexico was $134,951,-
300, and all the balance of the world produced $73,419,-
700. But of this $73,419,700 the South American and

APPENDIX 225

Central American States, all of which are silver-using
countries and equally interested with the United States
in maintaining the price of silver, produced $25,044,700,
and the Dominion of Canada produced $321,400, which
makes a total production in America of $160,317,400, and
all the balance of the world produced only $48,053,600.
The amount actually produced in Europe was $19,155,-
100. The amount produced in Great Britain, the country
that now assumes the prerogative of fixing the value of
the silver bullion of the world, was $327,700. England's
production of silver is less than two mills on the dollar of
the total production. Instead of being able to dictate the
value of silver bullion, she ought not to be consulted at
all. She should have no voice in the matter. In fact
Europe combined could not, as against the wishes of
America, exert much, if any, influence on the value of
silver. The amount of her production or of her actual
consumption of silver is too trifling to have any material
influence on its market value. Europe requires a certain
amount of silver bullion annually to keep up her supply
of token money, even though she might discontinue its
use as money of ultimate or final redemption. The
amount now being consumed by her for coinage purposes
averages about $32,000,000, annually, to which if you
add the amount consumed by her in the arts, it will be
found that instead of having silver to sell, she annually
consumes more than double the amount of silver that
she produces.

It may be a fine thing for Europe to allow her to fix the
price of silver bullion, but it is contrary to all precedent,
and an outrage on the silver-producing countries.
America produces more than three times as much silver
as all the balance of the world, and more than ten times
as much as the amount produced in Europe.

SEC. 392. The total amount of silver produced in the
world, outside of America, is not sufficient to supply the
demands of Europe for coinage purposes and for use in
the arts. It is not sufficient to supply the demand of
India for coinage purposes alone. It would hardly be
sufficient to keep the silver gods of China in decent

226 BIMETALLISM

repair, to say nothing about the necessity of a new one
now and then.

SEC. 393. Mexico, and in fact all of the South
American and Central American States, are equally
interested with us in maintaining the price of silver
bullion, and will gladly co-operate with us in any effort
we may make to restore silver to its former position and
value in the monetary system of the world. It would be
an act of imbecility for America, producing as it does
more than three-fourths of the silver produced in the
world, and more than ten times as much as the European
production, to allow Europe to fix the price of our silver
bullion. We have no interests in common with Europe
on the silver question. We are heavy producers of
silver. We have silver to sell. It is to our interest to
maintain the price of silver bullion. Europe is a heavy
consumer of silver. She does not produce enough to
supply her demands. She must enter the market and
buy silver, not only for coinage purposes, but for use in
the arts. It is to her interest to buy silver at as low a
price as possible. We cannot combine with Europe.
Let us combine with those who have interests in common
with us.

SEC. 394. America commands the supply of silver
bullion. The annual consumption of silver for coinage
purposes, notwithstanding the suspension of the coinage
of silver by the Latin Union, averaged for the years
1891, 1892 and 1893 over $143,000,000, and the con-
sumption in the arts for the same years averaged over
$27,000,000 (see report of Director of the Mint for 1894)
making a total annual consumption of $170,000,000,
only $48,000,000 of which are produced outside of
America. After consuming all the silver bullion pro-
duced outside of America, the world must buy from us
$122,000,000 worth of silver bullion annually for coinage
purposes, and they must pay the price fixed by us if we
have manhood enough left to fix a price. In fact, the
world has been paying at the rate of about $1.29 per
ounce for silver bullion ever since 1873, while we have
received on an average only about two-thirds that amount

APPENDIX 227

and the speculators of Europe have been pocketing the
difference. Is it not about time to dispense with the
European middleman and sell direct to the consumer at
actual value?

SEC. 395. How about the gold production of the
world ?

The report of the Director of the Mint shows that the
world's production of gold for the year 1893 was
$155,521,700, and that the amount produced in the
various countries was as follows:

America $49,050,700

Europe 28,165,100

Asia 13,311,500

Africa -. 29,305,800

Australasia 35,688,600

Total $155,521,700

It appears from the above and foregoing that America
is not only the greatest producer of silver in the world,
but that she is also the greatest producer of gold. Cer-
tainly, then, according to precedent, she has the right to
fix the ratio between the metals, and when she exercises
her prerogative and fixes the ratio the world will be
obliged to acquiesce in her valuation.

The total output of gold of America, Asia, and Russia,
all of which are silver-using countries, is $87,168,400,
and the production of the rest of the world is but $68,-
353,300, and of this amount $29,305,800 is produced in
Africa. Nearly all of the African gold is produced in the
South African Republic, a pure democracy in Southern
Africa. Africa has but little interest in monetary affairs
and is never consulted on monetary matters. If the
African product is deducted, or not counted on either side,
we have the world's annual production, exclusive of
Africa, $126,215,900, of which America, Asia and Russia
produce $87,168,400, and the balance of the world pro-
duces $39,047,500.

SEC. 396. The amount of gold produced in countries
now clamoring for a single gold standard is not enough by
more than $11,000,000 to supply the demand for gold for
use in the arts, even after counting in Australasia, with

228 BIMETALLISM

the gold monometallists. All the gold produced in these
countries and $11,000,000 worth of that produced in
silver-using countries would be consumed in the arts
before a single dollar's worth would be available for
coinage purposes.

The amount of gold produced in Europe, exclusive of
Russia — and Russia is not clamoring for gold, Russia is a
silver standard country today — is only $3,358,900,
or a trifle more than two per cent of the total output.
The greatest objection to silver comes from England.
England's bitter fight against silver dates from 1816, and
from that time until the present she has constantly
opposed its use as money. How much gold does she
produce? In 1893 she produced the enormous sum of
$42,300, less than three-tenths of one mill on the dollar
of the world's production for that year. To allow a
country virtually producing no gold or silver to dictate to
the bullion-producing countries what the ratio between
the metals shall be, or to have any influence whatever in
fixing the ratio, or to be even consulted in any manner,
is an outrage on the intelligence of the rest of the world.

SEC. 397. But it may be claimed that Great Britain
should be credited with the gold produced in her colonies
and dependencies. If this was done let us see how the
account would stand.

Gold produced in Great Britain $ 42,300

" Australasia 35,688,600

" Dominion of Canada 927,200

" British India 3,813,600

" British Guiana 2,567,400

$43,039,100

But of the gold produced in Australasia $32,059,354
was coined into money in the Australian Mint (see
report of Director of the Mint), consequently that amount
of the Australian bullion could not have been exported to
England; therefore this amount must be deducted, which
leaves $10,979,746 as the total supply that the mother
country could by any possibility have received from her
colonies.

APPENDIX 229

SEC. 398. It may, however, be claimed that England
should have credit for at least a part of the African out-
put. Undoubtedly a portion of the gold mined in Africa
is taken out by English operators, but I have no means of
ascertaining what proportion. The gold mines of Africa
are common plunder for the entire world. Every
nationality has its representatives in Africa digging for
gold; and as nine-tenths of the world today are using
silver as full legal tender money, all of whom are inte-
rested in maintaining the value of silver, I take it for
granted that the nine-tenths can get away with as much
African gold bullion as the other one-tenth, consequently
I leave the African output entirely out of the case. If,
however, Great Britain controlled all of it she would still
have less than the American output. If she controlled all
the African gold she would still have less than the
demand for consumption in the arts, to say nothing about
controlling the coinage ratio of the world.

SEC. 399. If in 1546 Spain, simply because she was
the greatest producer of gold, was able to arbitrarily
establish and maintain for one hundred years the ratio
between gold and silver, and then Portugal, because she
had become the greatest producer of gold, was able to
arbitrarily raise its value as compared with silver and
maintain her ratio for another hundred years, and if
Spain, then having become again the greatest producer
of the precious metals, but now, silver being the metal of
which there was the greatest production, by her arbitrary
edict was able to raise the value of silver as measured by
gold, and the rest of the world was obliged to acquiesce
in these several valuations so fixed first by Spain, then
by Portugal, and afterward by Spain again, simply be-
cause at the time the several ratios were fixed these
nations were the greatest producers of gold or silver,
what is to prevent the United States with her immense
commerce, and annually producing, as she does, hun-
dreds of millions of" dollars' worth of the absolute
necessaries of life that Europe needs and must have and
can procure nowhere else, and controlling as she does a
monopoly of both gold and silver, what is to prevent her

230 BIMETALLISM

from establishing and maintaining any ratio between the
metals that she sees fit to establish? Nothing but the
ignorance, stupidity, cowardice, or rascality of the mem-
bers of our National Legislature.

SEC. 400. Is there any danger of our getting too
much silver money in the United States? The report of
the Director of the Mint published in 1893 shows that
the total amount of silver coin now in existence is
$4,042,700,000. If we had all of it, it would make a per
capita circulation of about $58 for our present population,
and that is not too much money for the business interests
of this country. France has nearly that sum per capita,
and France is now the most prosperous country in the
world.

SEC. 401. In 1865 and 1866 we had in the United
States, including the seven-thirty notes and the various
other issues that were by law a legal tender and lawful
money, a greater per capita circulation than all the silver
in the world would give us now; and it must be conceded
that we then had the most prosperous times this country
ever experienced. Even Hugh McCulloch admitted that
at that time "the people were prosperous and compara-
tively free from debt."

SEC. 402. But it is insisted by the gold standard men
that silver is too bulky and heavy to be used as money,
that the silver we now have will not circulate, and that
the Government has impoverished itself already in build-
ing vaults in which to store it.

So far as its circulation as money is concerned we now
have a law allowing any person who has ten or more
silver dollars to deposit them with the Treasurer or any
Assistant Treasurer of the United States and receive
silver certificates therefor; and the only reason so much
silver is now on deposit is because the people prefer the
certificates. Every silver dollar now on deposit in the
United States Treasury is discharging the money function
by its paper representative. Silver certificates could be
advantageously used in the United States for every dollar
of silver in existence in the world.

All the coined silver in the world could be put into a

APPENDIX 231

single room sixty-six feet square and sixty-six feet high.
It would not take a very large vault to hold all of it; and
all this talk about impoverishing the Government to build
vaults to hold our silver is the veriest nonsense.

SEC. 403. But what is the probability of our getting
all the silver in the world or any considerable portion of it?

About one-half of the silver in the world is in India and
China. India and China are silver-using countries. They
do not use gold as money. China and India now are, and
for many years have been, heavy consumers of silver. In
order to obtain the amount of silver required by them they
have established a ratio of 15 to 1. Every ounce of silver
they have cost them $1.37. This certainly is not cheap
silver. Not a dollar's worth of this silver could be brought
to the United States without a loss of at least seven per
cent, to the shipper, besides the cost of transportation.
No one supposes, and even the gold standard men do not
claim, that any silver would come to this country from
Asia.

SEC. 404. The total amount of silver in Europe is
$1,484, 000 ;000, all of which is coined into money, none
of it at a higher ratio than 15^ to 1, and most of it at a
much lower ratio. None of the European silver is cheap
silver, and none of it could be shipped to this country
without a loss of at least three per cent, to the shipper
besides cost of transportation. None of it can be spared
from the circulating medium of the several nations where
it is now being used as money.

Not only can none of the stock now on hand be spared,
but the demand in Europe is for more silver. . In 1893
the amount of silver coined in Europe was over $34,000,-
000. And the amount coined for the years 1891-2-3
averaged over $32,000,000 annually. (See Report of
Director of the Mint for 1894.) Europe has no silver to
spare. The United States, under free and unlimited
coinage, instead of importing silver, would continue in
the future as she has been in the past, a large exporter
of silver bullion.

SEC. 405. It is insisted by the gold standnrd advo-
cates that the free coinage of silver would drive gold out

232 BIMETALLISM

of the country. Of course no person can know that such
would be the result, he can only guess that such a thing
might happen. These same men told us that the com-
pulsory coinage of silver under the Bland Act would drive
all the gold out of the country, but it did not do so. The
report of the Director of the Mint shows that in 1878,
when the Bland Act became a law, there was but
$213,000,000 in gold in the United States, and that from
that time until 1893 there was coined in the United
States from $2,000,000 to £4,000,000 of silver every
month, and that in 1893 we had $646,000,000 in gold in
the United States. Instead of driving out the gold there
was a constant stream of gold flowing into the country.
They were certainly false prophets in 1878, and we
have no evidence that they have received any special
inspiration since that time. There is not a particle of
danger of silver driving gold out of the country. Foreign
demand for gold may cause its exportation, but silver
will not drive it out of the country.

SEC. 406. The report of the Director of the Mint for
the year ending June 30, 1894, on page 57, shows that
the world's production of silver for the years 1891, 1892,
and 1893 amounted to $583,464,000, rated at the ratio of
16 to 1. The same report shows (page 54) that the
annual consumption of silver for use in the arts is
$27,554,280. This will give a total consumption in the
arts for three years of $82,662,840. On page 270 the
same report shows that the silver coinage of the world
for the same time was $430,169,558. If these figures
are correct — and without doubt they are substantially
true — there was a surplus left over each year, on an
average, of $23,547,200 worth of silver bullion.

SEC. 407. The loss of silver from abrasion and from
other causes is enormous. The Director of the Mint
published a tabulated statement in 1893, from which it
appears that the world's production of silver from 1492 to
1893, a period of four hundred years, was $9,726,072,000,
and that the total amount of silver money in actual
existence in 1893 was $4,042,700,000, less than one-half
the amount produced.

APPENDIX 233

With such a ratio of loss, I think any fair-minded man
will concede that the $23,547,200 yearly surplus will not
be more than sufficient to make up the loss from abrasion
and accident to the stock of coin now in existence.

SEC. 408. Is there enough gold to furnish the people
with the necessary circulating medium? Turning again
to the Report of the Director of the Mint for 1894, we
find (on page 57) that the world's production of gold for
the years 1891-2-3 amounted to $432,470,000, or an
average annual production of $144,118,666. On page 53
of the same report it is shown that the annual consump
tion of gold in the arts is $50,177,300. This leaves for
coinage purposes $93,941,366.

If gold is to be the money of the world, we shall find,
by dividing the amount of gold available for coinage
purposes by the population of the world, that it would
give us an annual increase in the circulating medium of
six cents per capita, providing none of the stock on hand
was lost or destroyed.

But the advocates of the gold standard insist that it is
not fair to divide the available supply by the total popu-
lation of the world, because they say a large proportion
of the people of the world do not use gold as money.
Very well, suppose only one-fourth of the people use gold
as money; then the annual per capita increase in circula-
lation, provided none of the stock on hand be lost or
destroyed in any manner, would be twenty-four cents.
But would there not be some loss from abrasion and
accidents? The Director of the Mint, in tables heretofore
referred to, published in 1893, shows that the world's
production of gold since 1492 amounts to $8,204,303,000,
and that the total supply of gold money in existence Aug.
16, 1893, was $3,582,605,000. This shows a tremendous
loss of gold, particularly when we take into consideration
the fact that more than two-thirds of the eight billion
dollars' worth of gold was produced within the last
hundred years. There can be no question but that with
a single gold standard there must be a constantly
diminishing volume of money.

234 BIMETALLISM

SEC. 409. None of the nations of Europe are benefited
by the demonetization of silver except England, and all
of them, with the exception of England, would follow the
United States in its remonetization.

England is the great creditor nation of the world;
her imports are largely in excess of her exports; she is
therefore interested in having dear money and cheap
commodities. If commodities are cheap and money dear
but little money will be required to settle her balances of
trade; and if money is dear, that is, if its purchasing
power is great, the amount received as fixed charges on
the interest-bearing obligations she holds against other
nations and the people of other nationalities will be much
more valuable, and will go farther in paying for such
commodities as she must obtain from abroad than it
would with a large volume of money in circulation.

Again, England, or English capitalists, who control the
financial policy of England, are making large sums of
money annually in buying silver bullion at much less than
its coinage value from the American producer and
exchanging it in India and other silver-using countries at
its full coinage value for wheat, cotton, and other com-
modities for import into England. England will not agree
to international bimetallism. It is not necessary to have
her co-operation in order to maintain bimetallism.

SEC. 410. Bimetallism has existed since the first
dawn of civilization; England, however, as long ago as
in the first half of the eighteenth century favored mono-
metallism. Desiring dear money and cheap commodities,
she exerted all the influence she possesses in favor of the
discontinuance of the use of one of the metals; and
believing that silver would be the most abundant and
that it was a plebeian money, the money of the common
people, she sought to discredit it. Dutot in 1739,
Dessortous in 1790, and Lord Liverpool in 1808, as the
champions of the aristocracy and money lords of England,
urged upon Parliament the propriety of monometallism.
Finally, in 1816, silver was demonetized. Notwithstand-
ing the fact, however, of the demonetization of silver by
England, bimetallism was still maintained, all the mints

APPENDIX 235

of the world, except those of England, were still open to
the free and unlimited coinage of silver, and silver did
not depreciate a single point in value as compared with
gold. England could accomplish nothing alone. Although
she did all that she could do to discredit silver, silver
remained on a parity with gold always at a ratio below
16 to 1, even in the London market, at all times between
1816 and 1873. It was not until after the demonetization
of silver by the United States, the greatest silver-
producing country in the world, that silver began to
decline value as measured by gold.

SEC. 411. A peculiar combination of circumstances
favored England in her war against silver in 1872-3.
Germany, elated by her victory over France, adopted the
single gold standard under the impression that the
$1,000,000,000 gold indemnity extorted from France
would place her upon a solid financial basis and make her
a creditor nation. She obtained her gold standard, but
instead of becoming a creditor nation she has so im-
poverished and degraded the great mass of her people as
to imperil the very existence of the empire. Germany
sees her mistake and would today be glad of any reason-
able pretext to return to bimetallism.

SEC. 412. France has not demonetized silver, but only
temporarily closed her mints to free coinage. The action
of Germany and France, two great commercial nations,
induced several of the smaller nations of Europe to dis-
continue the further coinage of silver, not because they
did not like silver money, but to prevent Germany, who
had a large stock of silver, from exchanging, after having
demonetized it, her silver for their stock of gold.

In the United States in 1873 our currency was paper
money. Gold and silver were not used as a medium of
exchange. In 1873 an act was passed by Congress enti-
tled "An Act revising and amending the laws relative to
the Mint, assay offices and coinage of the United States."

SEC. 413. It is charged that this act, which struck the
silver dollar from the list of coins, was corruptly passed
through both Houses of Congress. Whether British gold
was used to corrupt certain members of Congress, is not,

236 BIMETALLISM

and probably never will be positively known. But cer-
tain it is that not to exceed half a dozen members of
Congress knew at the time that the silver dollar had been
dropped from the list of coins, and they said nothing about
it in public. Certain it is that President Grant when he
signed the act did not know that the dollar was omitted.
Certain it is that the press of the country, which was
represented in both Houses of Congress by their special
reporters, knew nothing about it. Certain it is that the
people had never petitioned Congress for any such
legislation, and did not know that there had been any
such until nearly two years after the passage of the act.

The act demonetizing silver in the United States was
the most important and far-reaching in its consequences
of any act ever passed by Congress, and yet no paper
published anywhere in the United States at or near the
time of its passage contains any reference to it whatever.

Had the United States at that time been using gold and
silver as a medium of exchange, it would not have been
possible to pass such an act without close scrutiny by the
members of Congress and by the press of the country;
but no metallic money was in circulation, and an act to
revise the laws of the Mint was at that time not con-
sidered of much importance; and with the assurance of
the chairman of the committee having the bill in charge
that the act under consideration was simply an act
revising the laws relative to the Mint and assay offices,
etc., it passed without careful inspection. Such a com-
bination of circumstances is not likely to occur in the
United States again, and certainly no act to revise the
Mint laws of the United States will ever again pass
Congress without careful scrutiny.

SEC. 414. It is claimed that free coinage of silver
would stimulate production to such an extent that we
should soon have too much money, that everybody would
rush to the mines, and that in a short time we should be
flooded with money. It is quite probable that with
the price of commodities as they now are — wheat fifty
cents per bushel, cotton five cents per pound, and other
things in proportion — many people would desert the

APPENDIX 237

farm and ranch for the mine, for the reason that they
could realize more from their labor as miners than they
could from raising commodities.

But it should be borne in mind that the value of money
is regulated by the amount of money in circulation, and
that as the volume of money was increased, its purchas-
ing power would be correspondingly decreased; that as
the purchasing power of money was reduced, commodi-
ties would increase in valne, and a point would soon be
reached where the individual could realize more from his
labor in producing commodities than he could by mining
silver. As soon as that point was reached the great
mass of miners would desert the mine for the farm, and
the further increase of money would cease.

If coinage were free and unlimited, and extended to
both metals, the system would become self-regulating.
When the interest of the people demanded more money,
more bullion would be produced; when the demand for
noney was satisfied, the energies of the people would be
employed in producing commodities. The only thing
that could possibly interfere with this automatic regula-
tion would be the exhaustion of the gold and silver mines,
or the discovery of immense deposits of the so-called
precious metals in excess of the demand for money —
neither of which events is likely to occur. But should
either of these things happen, it would only be necessary
to limit the coinage, or use some other commodity as the
bearer of the money stamp, as the representative of the
money function. It is not necessary, however, to cross
this bridge until we get to it.

If there is a large volume of money in circulation it will
find its way into the hands of the people and it cannot be
so easily cornered by trusts, syndicates, and combines;
but if the volume of money is small, in proportion to the
demand, it can be cornered by the money king. If the
volume of money is small, its purchasing power is great
and commodities cheap, and the creditor class, the men
with fixed incomes and large capital, can manipulate the
money and control the destinies of the people.

238 BIMETALLISM

SEC. 415. There are thousands of men in moderate
circumstances, men who today are producing commodities
which they must sell on the market for less than the cost
of production, men whose every interest would be pro-
moted by bimetallism, that are shouting themselves
hoarse for a single gold standard, simply because such a
standard is demanded by their party leaders. These men
are honest and unselfish, but they are blinded by partisan
prejudice. But how about the honesty of the leaders, the
men who are informed, who know the consequences that
must result from the destruction of one-half of the money
in existence? These men are not honest; but instigated
by selfishness or by hope of party supremacy, in utter
disregard of the misery, poverty, and absolute serfdom and
slavery that must be entailed on the great mass of the
people, they have entered into the most gigantic and
fiendish conspiracy ever conceived by man to enrich
themselves and enslave the world.

While the money-using people have more than doubled
within the last half-century, and the demand for money
has been more than quadrupled by reason of the immense
advance in productive industry, these men propose to
destroy one-half of the money in existence and prevent
the people from making any more.

SEC. 416. If a single gold standard is adopted, the
annual production of gold will not be sufficient to supply
the demand for use in the arts and keep the old stock
good. If the single gold standard can be forced upon
South America and Asia, gold must inevitably appreciate
to at least four times its present value, commodities must
decline to one-fourth of the present price, and not a dollar
for all time to come can be added to the circulating
medium, but on the contrary there must be a constantly
diminishing volume of money.

This is the contest. If the money kings can force gold
monometallism upon the world they will succeed in estab-
lishing the most gigantic moneyed aristocracy among the
rich, and the worst system of peonage, serfdom and sla-
very among the masses that has ever cursed the human
race.

APPENDIX II.

PRICES- HOW CONTROLLED.

SEC. 417. Sauerbeck's Index Numbers, universally
recognized sa substantially correct, show that taking the
general average of prices for 1867-77 as a basis of calcula-
tion and the numeral 100 as representing the average
prices of 1867-77 that the general trend of prices since
1873 has been downward. In 1880 there was a slight
rally in prices, and also in 1888, but in both instances
they soon fell to a lower level than before. The general
trend has been downward and in 1896 prices had fallen to
61 as compared with the index number of 100 — a loss of
39 points. — In 1897 another rally in prices set in and up
to and including September, 1899 (the latest accessible
report) had rearched a level of 70, thus regaining 9 of the
39 points lost since 1867-77. (For explanation of Sauer-
beck's Numbers see Sections 193 to 198 this volume.)

SEC. 418. A rise in the general level of prices may be
caused either by an increase in the volume of money as
compared with the commodities to be exchanged for
money, in which case all things will rise in price, or it
may be caused by war, short crops, legislation, specula-
tion, trust combinations, and other causes, in which case
the price of some things will rise while others remain
stationary or may even decline. But the rise in price in
the commodities coming under the special influence of
such subsidiary causes may be so great that when dis-
tributed over the whole list of commodities considered, as
is done in Index Numbers, will show a general rise.

SEC. 419. Del Mar in his "Science of Money,"
second edition, page 197, in showing the causes that may
produce a rise in the level of prices, says:

240 BIMETALLISM

" Besides those changes in the general level of prices which arise
from changes in the whole sum of money, there is a subsidiary and
partial movement of prices— a change in the price of certain things,
not of all things— which arises from war, legislation, speculation,
foreign commerce, fashion, the chances of mining discovery, good
and bad harvests, the progress of mechanical invention, ' overpro-
duction ' and other causes.

" These influences directly affect value, whilst money only affects
price; these influences whether separately or combined, may only
affect the value of some things, they cannot affect that of all;
whilst money cannot affect any without affecting every one. With
the fluctuations of value occasioned by the various causes set forth,
the Science of Money has no concern; they belong to the counting-
house."

SEC. 420. A rise in the general level of prices result-
ing from a gradual and constant increase in the volume of
money relatively to the demand for money is always
beneficial. As Professor MacCulloch has said: "It
loosens the country as nothing else could from the old
bonds of debt and habit. It throws increased rewards
before all who are making and acquiring wealth some-
what at the expense of those who are enjoying acquired
wealth. It excites the active and and skillful of the com-
munity to new exertions, and is to some extent, like a
discharge from his debts is to the bankrupt long struggling
against his burdens." On the other hand a rise in the
general level of prices produced by causes other than an
increase in the volume of money, although it may for the
time being stimulate business, especially in the produc-
tion of the commodities that have risen in price, and may,
in certain cases, cause a rise in the wage of the men
employed in those special industries, it must in the end
be detrimental to the great mass of the people. It
enriches the few at the expense of the many. As a rule
the things that the wealth producers are obliged to
purchase have risen in value while the things they have
to sell have remained stationary or have fallen in value.

SEC. 421. An examination of the price list will show
that not all prices have risen, but the prices of some
things only, and that the commodities that have risen in
price almost without exception are those that are con-
trolled by trusts or those for which an unusual demand
has been created by war, short crops or legislation; and

APPENDIX II. 241

that things not so controlled, or influenced, have remained
stationary or have fallen in value. There is no economic
reason why wire nails, window-glass, printing paper,
and hundreds of other articles controlled by trusts, should
have risen in price 100 per cent, and some of them even
200 per cent., and why farming land and the products of
the farm have remained stationary or have fallen in price.
The present rise in price has no economic significance,
and, instead of being a blessing, will tend to widen the
gulf between the moneyed aristocracy and the wealth-
producers. I quote from the Los Angeles Daily Herald
of December 11, 1899, the following:

" If you do not think the trusts are getting in their work, just
read this statement of E. H. Crosby, a leading merchant of Topeka,
Kansas:

'" In August I bought ' Blackstone,' a brand of muslin, for 4% cents a yard. In
September I paid 5J6 cents for the same goods. Lonsdale cambric bought in August
for 5^ cents and in September for 7% cents. Woolens have advanced fully 10 per
cent., and lace curtains 25 per cent., while table cloths and linoleums have advanced
15 per cent. Furniture is going clear out of sight, and this applies specially to iron
beds. All kinds of carpets, except Brussels, have gone up in price. It is all foolish-
ness to pretend that this increase in price is due to an increased demand. The
combinations among the manufacturers are the potent factors.' "

SEC. 422. That the rise in the general level of prices
that has taken place since 1896 has not been occasioned
by an increase in the volume of money becomes apparent
from an examination of official statistics.

The money in the world on the first of January, 1896,
is reported by the Director of the Mint in his annual,
1896, report, page 46, at $4,143,700,000 in gold, $4,236,-
900,000 in silver, and $2,558,000,000 in uncovered paper
money. This gives us a total at that date of $10,938,-
600,000, of which $8,380,600,000 was metallic money.

The report of the Director of the Mint for 1898, page
48, claims that on the first of January, 1898, the world's
volume of money consisted of $4,594,900,000 in gold,
$3,977,500,000 in silver, and $2,322,800,000 in uncovered
paper money. This shows a total on January 1, 1898,
of $10,895,200,000, of which $8,572,400,000 was metallic
money. This estimate of the Treasury Department
shows a gain of $191,800,000 in metallic money, and a
loss of $235,200,000 in uncovered paper money, or a net
loss in two years of $43,400,000.

242 BIMETALLISM

SEC. 423. The gold and silver bullion that has been
or that will be produced in 1898 and 1899, of course is
not known, but the most extravagant estimates do not
place it above $500,000,000 worth annually or $1,000,-
000,000 for the two years. The amount of this bullion
that has been coined or that will be coined into money
probably will be about the same per cent, of the pro-
duction that was coined in the years 1896 and 1897. The
production in 1896 and 1897 was £894,360,300 (see report
of Director of the Mint, 1898, page 59). It appears from
the statistics already quoted that after supplying the
demand for the arts and manufactures and making good
the loss from abrasion and casualty to the coins in stock,
that there was but £191,800,000 worth left to add to the
stock of money, or 21 per cent, of the total production.
Assuming that the production of 1898 and 1899 will
amount to £1,000,000,000 and that 21 per cent, of it will
be added to the volume of money, such addition would
increase the metallic money to £8,782,400,000 by the first
of January, 1900. Assuming also that no further con-
traction will be made in the paper money, the world's
stock of money January 1, 1900, will amount to $11,105,-
200,000, an increase of $166,600,000 in four years, or an
average annual increase of $41,650,000. Such an increase
in the volume of money instead of promoting a rise in the
general level of prices would not begin to keep pace with
the increasing demand for money. The development of
trade and expansion of business require, in order to main-
tain prices, not $40,000,000 annual addition but $400,-
000,000 annual addition to the world's volume of money.

SEC. 424. If not an ounce of the gold and silver now
being produced from the mines and placers of the world
was consumed in the arts and manufactures and all of it
should be coined into money, it would be hardly sufficient
to keep pace with the increasing demand for money and
maintain prices at the present level. The money kings
do not propose to permit an increase in the volume of
money. They do not want rising prices but falling ones.
They are not content with the consumption of 75 or 80
per cent, of the precious metals for other than monetary

APPENDIX II. 243

purposes. They demand that silver, now constituting
about one-half of the metallic money of the world shall no
longer be admitted to the mints of the world on terms of
equality with gold and that all silver coin now in use
shall be regarded as token money only and that it shall
be redeemed in gold. But even this is not all. They
demand that the $2,332,800,000 of uncovered paper
money now outstanding, amounting to more than one-
fifth of the world's volume of money, shall be called in
and cancelled, and that the prerogative of issuing and
controlling paper money shall be surrendered to them.

SEC. 425. We have already seen (see Chapter XIII.)
that the establishment of the gold standard in England
resulted in doubling the value of the bonds, mortgages
and other evidences of indebtedness held by the wealthy
classes, in robbing the debtor and wealth producing
classes, in contracting the wealth of the kingdom in the
hands of a small per cent of the people, and in the bank-
ruptcy and ruin of 130,000 out of 160,000 of the small
land-owners in England. Notwithstanding these well
known facts we have in the United States a large num-
ber of would-be English-imitators who are now attempt-
ing to fasten a similar financial policy on this country.
This class is composed largely of wealthy and influential
men. They own the trusts and combines, they control
the banking interests, they dictate the policy of most of
the great newspapers of the country, they are attempting
to influence the pulpit, and they are making a desperate
effort to control the republican party, and do, in fact,
control most of its great leaders. Many of the rank and
file, however, of that party have not yet surrendered
their manhood at the dictation of the money power.
Hundereds of thousands of silver republicans deserted the
party in 1896, and it is to be hoped that hundreds of
thousands will, now that the policy of the party is made
clearly manifest, desert it in 1900.

SEC. 426. I quote an editorial of the Emporia Daily
Republican of May 23, 1899, that proves that not all the
men who voted the ticket in 1896 can be counted for the gold
standard in 1900. The editorial is in the following words:

244 BIMETALLISM

" THE GOLD STANDARD— Trusts are the legitimate offspring of
the gold standard. If you would get rid of the effect you must
remove the cause. Trusts have been formed, are being formed and
will be formed. Nothing will stop them but a change in the finan-
cial policy of the country. All the small industries of the land are
being closed out. Competition is being destroyed, men are being
thrown out of employment in the shop, factory and on the road.
The country is rapidly becoming impoverished, wealth is concen-
trating in the hands of the few, interior cities are struck with the
dry-rot and there is no hope for the people under a gold standard
money policy. It is the parent of trusts. It is a money policy
which paralyzes industry and drives the larger fish to eat up the
smaller ones. The gold standard is commercial cannibalism. It is
serfdom for the masses. It is a head wind against all transporta-
tion lines. It is the undermining rat of our republican institutions.
Don't stop to argue the question with jugglers of figures, but vote
to down it in the party if you can, out of it if you must. Country
first, party next. As we said in yesterday's Daily Republican,
referring to the wealth of the Rockefellers, Vanderbilts, Goulds,
Astors and others, ' ' if there is anything that shows the incapacity
of the people for self-government it is a system of legislation under
which the accumulation of such vast sums, by individuals, is
possible." Interior banks, under the national banking system, have
felt and will feel more perceptibly than ever before, the gradual
squeeze of the gold standard, the concentrating power of which
tends to centralize all business, all industries and all commerce in
three or four cities located on the larger bodies of water — one on the
Atlantic, one on the Pacific, one on the lakes and one on the
Gulf —to the utter destruction of life and prosperity in the interior.
These larger cities will in turn waste away because they will
eventually have no country to back them. The gold standard is
the road to ruin. Expansion or anti-expansion, is an incidental
question. Every patriotic citizen, who loves his country more than
his party, should vote in the interest of humanity, to save the
United States from the disastrous consequences of the gold standard
money policy, which is now sought to be permanently fastened upon
this country for the purpose of bringing our people under European
conditions.5'

SEC. 427. While it is true that the adoption of the
gold standard in England made scores of millionaires in
Great Britain and would make hundreds perhaps
thousands of millionaires in this country it is also true
that it made hundreds of thousands of paupers there and
would make millions of them here. That a gold standard
has never been a good thing for the people, or satisfactory
to the people even in England is an admitted fact. It is
simply a system by which the rich can rob the poor
under protection of the law. Sir Guilford Molesworth, a

APPENDIX II. 245

distinguished English economist, in an address delivered
before the 1892 International Monetary Conference,
pointed out the defects in the system; a part of this
address is quoted in Sec. 148, this volume, which see.

SEC. 428. A gold standard in the United States
would be infinitely worse and more unsatisfactory than it
is for England. Some of the reasons why it is not at all
suited to the conditions of things existing in the United
States are given by Del Mar in his recent publication
entitled " Barbara Villiers or a History of Monetary
Crimes," page 47, from which I quote the following:

" Our foreign commerce does not consist, as
does that of England, in the profitable func-
tion of buying, selling and carrying for the
rest of the world; but chiefly in buying, for
our own cousumption, classes of merchandise
which could probably be better produced at
home, and in selling our grain, cotton and
tobacco crops at half price. England has 320
millions of vassals laboring for her in India
and Burmah, she has 40 millions elsewhere,
she has many millions of negroes in Africa
who are virtually slaves, she has 15 million
tons of merchant shipping, a navy equal to
that of any three other powers, and coaling
ports in every sea and clime. Unless we pro-
pose to reduce our own working class to the
wages and condition of the Indian ryot, the
African slave, or the British pauper, we
cannot compete with an industry that is built
upon such a stupendous mass of iniquity, or
which has attained such gigantic dimensions.
And if both economical considerations and
merciful feelings warn us to avoid a field in
which there is neither honor nor profit for us,

246 BIMETALLISM

we should be prepared to renounce the British
monetary system which is fitted alone for
that field. Its basis is robbery of the weak
and barter with the strong; its means are a
monetary system entirely subjected to the
bankers and foreign merchants of London;
its aim is the elevation of this sordid and
cynical class to the ownership and govern-
ment of the earth. We Americans want no
more of it! We demand that the Govern-
ment shall resume the control of money.
We demand that silver shall be coined on
precisely the same terms as gold, whatever
those may be, and that both metals shall be
subject to Governmental seigniorage; we
demand that the ratio of value in the coins
of these metals shall be as it was before and
is yet — 1 6 for i of weight; we want no
international treaties nor entanglements on
the subject of money. In short, we demand
that the monetary crimes of 1866, 1868, 1870
and 1873 shall be undone and the authors
of the latter proclaimed and exposed to the
execrations of an outraged people!"

THE END

INDEX

INDEX

•THE REFERENCES ARE TO SECTIONS. NOT TO PAGES

*

Abrasion, 9. 407

Act of 1873, 235, 238, 253

Ad valorem, 121

Advantages of Bimetallism, 144

to 163, 414, 415
Advantages of Silver money,

324,325

Africa, 4, 12, 325, 395, 398
Agio at the Bank of France, 166

167, 168, 170

Agramonte, Gen. C. H. M. 351 |
Agriculture in Mexico, 323, 338, !

345, 347, 349, 351, 353
Agriculture in the United States,

328

Alberquerque, Duke of, 15
Aldenham, Lord, 224, 288
Alexander, 26
Alison, Sir Archibald, 181
Allison, Senator W. B. 138, 248
Alva, Duke of, 15
America, 4, 12, 14, 28, 64, 66, 147,

392, 394, 395
Americas, 4
American Colonies, 4
American goods, 332
Andrews, President E. B., 61
Andrews Economic Club, 315
Annoy, Madam d', 15
Arena, 75, 366
Argentine Republic, 325
Aristotle, 372
Asia, 8, 64, 66, 69, 71, 205, 208,

281, 286, 325, 395, 416

Asia, a sink for the precious

metals, 69, 70, 71
Associated Press dispatch, 356
Atkinson, 33,99, 112, 217, 234
Austin, L. F. J.,350
Australia, 5, 12, 16, 22, 64, 178,

234

Australasia, 286, 395, 397
Austria, 164, 178, 230, 234, 283

Bagehot, Walter, 100, 146

Bain, F. W., 88

Balbi, 3

Balfour, A. J., 133

Bank of England, 4, 147, 148,

149
Bank of France, 122, 147, 148,

149, 166, 167

Banking in Mexico, 337, 338
Bankers in Mexico, 337, 338, 342
Barbara Villiers, or a History of

Monetary Crimes, 428
Barbon, 376

Barbour, Sir David, 82, 133
Baring failure, 148
Beck, Senator, 251
Behm & Wagner, 3
Belgian Monetary Commission,

123

Belgium, 178, 329
Bell & Sons, 2
Bill of Rights, 4
Bimetallic law, 35b, 101, 116,

117, 119

INDEX
•THE REFERENCES ARE TO SECTIONS, NOT TO PAGES

249

Bimetallic law of France, 43, 52,

120, 174
Bimetallism, 44, 75, 104 to 143.

172, 174, 318, 366, 410
Bimetallism in France, 52, 118,

148, 164 to 178
Bimetallism, Advantages of, 144

to 163
Bimetallism in the United States,

261 to 304
Birch, J. W., 133
Birkmyre, 12
Biscaina, 4

Blaine, James G., 139, 245, 249 j
Blake, 12

Bland, Richard P., 246, 287
Bland-Allison Act, 103, 236, 237,

293, 383, 384, 385
Boissevain, G. M., 107 to 112
Bonebrake, Geo. H., 298, 299
Brahe, Tycho, Preface
Brazil, 4, 5, 35a, 232
Brazil, paper money in, 35a
Bricklayers in Mexico, 329
British Guiana, 397
British India, 397
Brogniart, 12
Brussels, 101
Bryan, W. J., 141
Bullion in stock, 212 to 224
Bullion value, 210, 211
Burchard, H. C., 24
Bureau of Statistics, 330
Business failures in Mexico, 323,

343, 346, 351

Caeser, 26, 37, 38

Cairnes, Prof. J. E., 100, 162,

310
California, 5, 16, 21, 22, 178, 234

Garden
341

Cape Colony, 286

' , L. E. G., 338, 330, 340,

Carolinas, 55

Case against bimetallism, 176

Carthage, 13

Central American States, 393
Cernuschi, Henri, 151
Chaplin, Henry, 133
Chapters on Silver, 220
Chevalier, Michel, 100, 101, 126,

127, 128, 178, 234
Chicago Post, 213
Chile, Republic of, 325, 357, 359
China, 4, 70, 357, 392, 403
Christian era, 31
Coffee Planters, 350
Coinage, Act of 1834, 55, 57
Coinage, Free, 37, 121
Coinage in Spain, 14
Coinage in Europe and America 9
Coinage ratio in 1717, 47
Coinage ratio, how controlled, 93
Coins, choice of, 119
Colloquy on Curreny, 46, 91, 98,

159, 160, 166, 169, 170
Commercial Dictionary, 35
Committee on Coinage and

Finance, 53
Comptroller of the Currency 281,

note

Condillac, 370
Congressional Record, 245, 246,

248, 251

Conkling, Roscoe, 140, 244
Considerations of the Currency,

55

Constantinople, Fall of, 37, 39
Consumption in the arts, 9, 58

to 74, 394, 422, 423
Continuation of the History of

Europe, 181
Contraction of money, effects of,

2, 181, 182, 183, 255, 256
Copernicus, Preface
Corea, 357
Cortez, 13, 26

Cost of gold in California, 21, 22
Cost of the precious metals, 16

to 26
Cost of production, 19, 20, 21,

88,89
Cotton and woollen industries in

Mexico, 327

250

INDEX

REFERENCES ARE TO SECTIONS. NOT TO PAGES

Courtney, Leonard H., 133, 134,

179

Cowdry, Mr. 240
Creditor classes, 128
Crises, Theory of Jevons, 158
Crittenden Thos. T., 330, 331,

332

Crop of Gold. 162
Crosby, E. H., 421
Cyclopedia, International, 377

Danson, 10, 12

Del Mar, Alex., Preface, 2, 4, 5, |
12, 15, 16, 21, 24, 28, 29, 32, j
33, 37, 66, 67, 72, 74, 84, 87,
92, 269, 281, note, 419, 428

Demand alone will not restore
the ratio, 293

Demonetization of gold attempt-
ed, 178

Demonetization of Silver, 233 to i

260, 412, 413

Demonetization, effect of, 227
Demonetization of silver in Eng-
land, 179 to 184

De Quincey, 234

Depreciated money a bounty for

exports, 309, 313, 314, 347, 353 !
Depreciation in prices, 227
Depreciation of silver, 185 to 200,

325, 327, 338
Dessortous, 410
Diaz, Porfirio, 324, 343
Director of the Mint, 71, 72, 205,

281 and note, 286, 391, 394,

400
Director of the Mint, reports of,

226, 281 and note, 422
Divergence between the metals,

261, 262

Dominion of Canada, 397
Double Standard, 36, 124, 125
Doubleday's Financial History '•

of England, 183
Due de Saint Simon, 15
Dumas, Senator, 258

Dumping ground for silver, 382
Dun, R. G., & Co., 346
Duport, 12

Dutch East Indies, 230
Dutot, 410

East Indies, 46

Economic force, 44, 100, 301

Edict of Nantes, 4

Egypt, 286

El Mundo, 324, 325

Emporia Daily Republican, 426

Encyclopedia Britannica, 30, 179,

232, 389, 390
England, 4, 46, 47, 164, 165, 184,

328, 329, 342, 409, 411
English interest in bimetallism

in the United States, 317
English monetary system, 148,

428

Estimates of the Treasury De-
partment, 281, note
Europe, 4, 12, 28, 36, 46, 64, 66,
103, 111, 205, 207, 227, 328,

329, 342, 391, 392, 395, 404
European coinage, 226
European Economist, The, 325
Evansville, Indiana, 342
Exception clause in the Bland-
Allison Act, 237

Exportation of the precious met-
als, 45 to 57, 305, 306, 307, 311,
312, 405

Exportation to Asia, 69, 70
Exports of the United States,
309 to 313

Facts and Figures about Mexico,

Falling prices, effect of, 4, 181,

182, 183, 184
Farm labor in the United States,

328
Farrar, Lord, 100, 133

INDEX

251

•THE REFERENCES ARE TO SECTIONS, NOT TO PAGES

Fiji Shimpo, 357

Finance Report of the United

States, 71
Financial History of England,

183

Fisher, Professor Willard, 176
Flanders, 164
Flapdoodle, 114
Fluctuations from the coinage

Ratio, 119, 120, 174
Fluctuations in prices of com-
modities, 344, 350
Foreign capital, 355
Fowler, J. M., 348
France, 4, 29, 37, 43, 46, 47, 52, !

110, 115, 120, 147, 148, 164, I

169, 177, 178, 230, 234, 329,

400, 411, 412
French coinage law of 1803, 118,

176, 177
French coinage law, changes in, j

174
French monetary system, 147,

149

French ratio, 51, 165, 174
Free coinage, 121, 228
Free coinage in England, 37
Free coinage in Holland, 37
Freedom of production, 18, 19
Freemantle, Sir Charles, 133,

213, 217

Frewen, Moreton, 287
Fronde of France, 4

Gallatin, Albert, 55

Gambling instinct promotes

mining, 24, 25

Garfield, James A., 140, 244, 247
Garnett, Lewis A., 20, 25
Genoa, 164
Geneva, 164

General Statutes, 235, 238
Georgia, 55
German States, 178
Germany, 4, 47, 132, 177, 230,

234, 283, 328, 329, 385

Gesell, Silvio, 325

Gibbs, Henry Hucks, 46, 91, 98,

159, 166, 169, 170, 287
Gibson, G. H., 213
Gide, Professor Charles, 82, 83,

Giffen, Sir Robert, 33, 60, 67,
72, 74, 99, 100, 112, 169, 175,
234
Gold mines and placers, the

Great, 5

Gold, production of, 7
Gold overvalued in 1834, 55
Gold standard in Argentine Re-
public, 325

Gold Standard in Chile, 325, 359
Gold Standard in England, 179

to 184, 425, 427, 428
Gold Standard in Japan, 357,

358

Gold Standard in Mexico, 336,
344, 345, 346, 347, 349, 351, 352
Gold standard Democrats, 141
Gold and silver prices compared,

191

Graham, Sir James, 182
Graham's Synonyms, 85
Grant, J. W., 343
Grant, President, 238, 240, 241,

413

Gratuitous coinage, 122
Greek Democracies, 163
Greeley, Horace, 291
Great Britain, 133, 317, 397
Groesbeck, William S., 36

M

Habeas Corpus Act, 4

Hamburg, 101

Hamilcar, 13

Hamilton, Alex., 144, 145

Hannibal, 13

Hat Edict, 98

Hay, Sir Hector M., 12, 213, 217

Head Professor, 73, 74

Hegewisch, Adolfo, 347

Helm, Elijah, 125

252

INDEX

JHP-THE REFERENCES ARE TO SECTIONS, NOT TO PAGES

Herschell, Lord, 133

Herald, Los Angeles, 356, 420,

426
History of the Precious Metals, |

1, 2, 5, 13, 21, 24, 28, 66, 87,

92,93
History of the Precious Metals

by Jacob, 16
History of Bimetallism in the

United States, 69, 70, 73, 74
Hoarding gold and silver, 160
Holland, 164, 178, 230
Holman, 246
Honest Dollar, 61
Hooper, 245, 246
Houldsworth, Sir W. H., 133
Humboldt, Baron Von, 3, 7, 12, I

Huskisson, Wm., 170
Hydraulic mining, 23

Increase of wealth 1860 to 1880,
309

Inconvertible paper money, 34,
35, 179, 180

Import duties, 339

Index numbers, 193, 199, 417,
418

India, 4, 70, 177

India, prosperity of, under a sil-
ver standard, 315

Indian Currency Commission,
35a, 179, 230, 231, 232

Indian Currency Committee,
224, 288, 289

Indian Mint, 103, 189

Individual coinage, 37

Industrial and Commercial His-
tory of England, 81

Inflation from bimetallism, 201 i
to 229

Influence of law on value, 95 to
103, 383

International agreement, 290

International Monetary Confer-
ence of 1867, 256

International Monetary Confer-
ence of 1878, 36, 174, 242, 256,
259

International Monetary Confer-
ence Of 1892, 62, 78, 79, 138,
148, 177, 254, 302, 313, 320

International Cyclopedia, 377

Intrinsic value, 75, 366, 367 to
381

Insurance, 176

Investigations in currency and
finance, 151

It is gold that is sick, 148, 186

Italy, 328

Italian republics, 4

Jacob, 3, 4, 8, 9, 12, 16, 65, 71

Japan, 4, 5, 70, 282, 315, 328,
357, 358

Japan, prosperity of, under sil-
ver, 315

Jefferson, Thomas, 55, 145

Jevons, Prof., 80, 100, 150 to
158, 178, 378, 379, 385, 387,
420

Joint Standard, 125, 198

Jones, Senator John P., 72, 77,
78, 79, 183, 234, 254, 255, 257,
258, 260, 310, 374

Juarez, 349

Journal des Economistes, 329

Judas, 253

K

Kansas City Star, 332
Kelley, Hon. W. D., 244, 245
King William, 46
Knox, John Jay, 243

Labor in demand in Mexico, 344,

347, 348

Land-owners in England, 184
Latin America, 325

INDEX

253

•THE REFERENCES ARE TO SECTIONS, NOT TO PAGES

Latin Union, 131, 132, 147, 177, |

230

La Tribuna Valparaiso, 359
Laughlin, Prof. J. Laurence, 33,

69, 71, 73, 74, 99, 113, 176, 234,

386
Laughlin's Bimetallism in the

United States, 70
Laughlin's Political Economy,

386
Laveleye, Professor M. de, 123,

163

Leavitt, Samuel, 243
Legal Tender, 35, 35a
Legislative demand, 387, 388,

389

Link that held the metals to-
gether, 271, 272, 292
Liverpool, Lord, 410
Lloyd, Henry D., 333
Locke, John, Preface
London, 101, 147, 171
London Financial News, 317
London Statist, 188
Los Angeles Herald, 356
Lubbock, Sir John, 133
Lucas, James, 332

M

Mallett, Sir Louis, 133
Manufacturing in Mexico, 323,

325, 327, 342, 344, 345, 347,

349, 351, 354
Market value for silver, 268, 269,

270
Marshall, Prof. Alfred, 187, 209,

210, 211, 223
Matsukata, 357
MacCulloch, Prof. J. R., 3, 4,

12, 35a, 420
McCulloch, Hugh, 401
McKinley, Wm., 140, 141
McLeod, Prof. H. D., 234, 375
Melting-pot fallacy, 106, 114
Mexico and the United States,

327, 328

and silver money, 329 to 365

Mexico, prosperity of, 313, 315,

323, 324, 326, 344 to 350, 356
Mexican army, 324

Central R. R. Co., 327

debt, 324

delegates, 313, 320

exports, 313, 314, 320,321. 322,

323, 338, 345, 347, 350, 353

Herald, 324, 326, 342

National R. R. Co., 344, 360

Trade Review, 320, 322, 323

wages, 323, 328, 329, 330, 340,

345, 347, 348, 350, 351
Mill, John Stuart, 17, 35a, 80,

89, 90, 100, 309, preface
Miller, Henry G., 220
Mint charges, 121, 176
Mirbach, Count, 316
Milreis, Brazilian, 35a
Molesworth, Sir Guilford, 62,

148, 177, 186, 192, 259, 302
Money and Civilization, 15, 29,

30, 32, 41

and Mechanism of Exchange,

150, 151, 379

and monetary problems, 63,

129, 191, 231

demand for, 129, 130

essential elements of, 94, 231,

232

held in reserves, 227

in 1809, 9

in the world in 1884, 63

in the world, where located,

71, 205, 422, 423, 424

question, 135, 221

stock of, in 1493, 3

stock of, in 1879, 3, 4

science of, 84

Trade and Industry, 76, 86, 90

value of, 93, 94
Monetary Conference of 1881,

147

Commission of 1876, 124

systems, 37, 269

system of England, 148, 149
Monometallists, 425
Monometallism, theory of, 115

254

INDEX

•THE REFERENCES ARE TO SECTIONS. NOT TO PAGES

Montague, Sir Samuel, 133
Monterey, 349
Montesinos, I. Dublan, 322
Moreton Frewen, 287
Morton, Gabriel, 344, 360
Muhleman, Maurice L., 218

N

Napoleon, 181, 183

Natural ratio, 151, 154, 155, 156,

157, 158

Netherlands, 47, 109
New Orleans Picayune, 324
New York, 101, 147
Newton, Sir Isaac, 46, 48, 49,

Preface
Nicholson, Prof. J. Shield, 129,

135,136, 191, 231
Normandie, M. de, 147, 149
North American Review, 328

O'Brien, Terrence, 114
Objections to 32 to 1 ratio, 96,

289, 290, 291
Occident, 37
Omaha, 142
Ord, E. G., 349

Orient, 67, 68, 71, 126, 212, 226
Our Money Wars, 243, 252

Pacific Coast, 161

Palgrave, Mr., 63, 64, 67, 72, 74

Papal States, 4

Paper money, 306, 307, 308, 35a,

Paper money in England, 179
Paper money in the United

States 1861 to 1880, 309
Paraguay, 35a
Paris, 332

Parity of exchange, 230, 231, 232
Per capita circulation, 3
Perry, Prof. A. L., 373
Petty-Jacob, 3

Philip IV., 14, 15

Philippine Islands, 324

Pizarro, 13, 26

Political Economy, Mill, 17, 80

Political Economy, Jevons, 80

Political Economy, Gide, 83

Portugal, 389, 390, 399

Portugal, Moidores of, 46

Premium on coins, 116, 117, 119

Premium on gold, 327

Precious metals, production of,

6, 12, 40, 41, 42, 120, 157, 158,

189, 386, 395, 406, 408
Prices, 203, 204, 417, 418, 419,

420, 421, 422, 423, 424
Probable fall in the value of

gold, 126
Production of gold in Africa, 395

in America, 395

in Asia, 395

in Australasia, 395

in Europe, 395
Production of silver in America,

391, 392

in Europe, 391, 392
Prosperity, causes of, 327, 343,

344

Protective tariffs, 333, 334, 335
Prussia, 29
Purchasing power of silver in

Mexico, 328, 339, 340, 344,

345, 347, 348, 350
Purdy, Mr., 346

Quarterly Journal of Economics,
176

Railroads in Mexico, 322, 324,

338,348,
Ratio between the metals, 27 to

44, 129, 131, 156, 175

is arbitrary, 156, 157, 158, 264,

of the Moors in Spain, 156

INDEX

255

H^THE REFERENCES ARE TO SECTIONS, NOT TO PAGES

Ratio of other nations in Europe.

156, 164

of Rome, 38, 156

of United States, 51, 52, 53,

54,55

of 32 to 1, objections to, %
Raynal, 12
Reformation in Western Europe,

Republican Party, 138, 139, 140,

141, 142, 143, 317, 425

League, 142

Convention of 1896, 140, 142,

143

Restriction Act, 179
Reservoirs, the two, 152, 153, 387
Resumption, Act of 1819, 181, 184
Revenue Laws, 335
Ricardo, David, 35a, 231
Rising^ prices, effect of, 4, 124,

126, 127, 128, 131, 418, 419,

420, 421

Rogers, Prof. Thorold, 81
Roman Mining, 13
Roman or Greek Empire, 37
Romero, Don Matias, 327, 328,

329, 338, 342, 352, 353, 354, 355
Rosebery, Lord, 338
Rothschild, Baron de, 294, 295,

257, 259

Rowland, M.,122
Royal Gold and Silver Commis-
sion, 129, 131. 132, 133, 187,

209

Rusconi, Count, 102
Russia, 4, 5, 147, 178, 283, 396

San Francisco Chronicle, 309

Sargent, Mr., 248

Sauerbeck, Mr., 12, 193, 194

Saxony, 164

Scandinavia, 230, 385

Schools in Mexico, 322, 324

Science of money, 84, 281, note,
419

Science Primer of Political Econ-
omy, 158

Scipio,26

Scotland, 46

Scramble for gold, 267, 281, note

Seigniorage, 14, 121, 174, 175,

176, 278

Seyd, Ernest, 3, 259
Sherman, John, 243, 245
Sherman Act, 103, 205, 293, 383
Shibley, Geo. H., 221
Siam, 70

Sibley, Joseph C., 216
Silver bullion in stock, 210, 211,

212, 213, 214 to 226, 275, 280
Silver, coinage of, 273, 274, 275

annual coinage of, 226, 274

depreciation of, 185 to 200,266

money in the world , 281 , 286,

290

money, more required, 282

money in Asia, 281

money in Europe, 281, 283, 284

money in the United States,

281

money in Mexico, 322, 323, 324,

325, 327, 328, 336, 348, 349,

353, 354, 355

money, where located, 281

overvalued in the United

States in 1792, 54, 55

too heavy for money, 402

plate, 15

The Future of, 59

Republicans, 141

Situation, 219

Production of, 40, 41, 42
Simple, Peter, 114
Simon, Due d' Saint, 15
Sir Robert Peel Act, 181
Smith, Adam, 17, Preface
Soetbeer, 12, 58, 67, 72, 74
Sombrereta, 4

South African Republic, 286
South America, 26, 286, 393, 416
South Sea, 4
Spain, 13, 14, 26, 41, 46, 328,

389, 390, 399
Spencer, Preface
Spindola, Senor R. R., 324

256

INDEX

•THE REFERENCES ARE TO SECTIONS. NOT TO PAGES

Sprague, Prof. A. R., 315
Statistical Journal, 3, 10
Stokes, Anson Phelps, 296, 297
Storch, 3

Straits Settlement, 70, 357
Suess, Prof. Eduard, 59, 67, 72,

74
Supply and demand, 95, 334

Tariff, 333, 335

Taussig, Prof. F. M.,219

Taylor, J. P., 323

Telegraph in Mexico, 324

Theory of Bimetallism, 116, 117

The European Economist, 325

The Greater Japan, 358

The London Statist, 188

The Trader, 343

The Two Republics, 345

The United States can coin all

silver offered, 280
Thurman, Senator, 252
Tiji Shimpo, 357
Tooke, 12
Treasury Department estimates,

281, note
Trusts, 333, 334, 335, 418, 419,

420

Towne, Hon. Charles A., 222a
Turkey, 328

L)

U. S. coinage law of 1792, 53, 54

U. S. coinage law of 1834,54

U. S. alone can maintain bimet-
allism, 177,287, 302,303

U. S. on a silver basis, 305 to
318

United States, 4, 29, 49, 51, 72,
103, 115, 132, 136, 138, 177,
183, 205, 206, 226, 230, 328
335, 342, 360, 400

United States Monetary Com-
mission, 124

United Kingdom, 132

Vail, Wm. L., 345
Valenciana, 4
Value, 75 to 86, 367 to 381
Value affected by legislation, 383,

384, 387, 388, 389
Value is not intrinsic, 367 to 381
Value of commodities, 17
Value of coins, 192, 108, 113
Value of the precious metals, 17,

26, 87 to 94, 267, 268, 269, 277
Venice, 164
Voltaire, 3
Voorhees, Daniel, 245, 249, 250

W

Wage earners in Mexico, 323,
32/, 328, 329, 334, 345, 349,
350

Wages of farm labor in the Uni-
ted States, 328, 348

Walker, Prof. Francis A., 76,86,
90, 100, 242, 256

War, 418, 419, 421

Ward, 12

Warner, A. J., 215

War in Germany, 4

Wealth of Nations, 17

Wealth vs. Commonwealth, 333

Weavers, 329

Wells, David A., 33, 99, 112,
234

West Indies, 230

Western World, 9, 66, 69, 70,
71,72

Wolowski, Louis, 151

Wood, Col. S. N., 300

World's demand for money, 276,
423,424

World's coinage for 1894-5-6-7,
226, 274

World's production of gold and
silver, 6, 12, 40, 41, 42, 120,
157, 158, 386, 395, 406, 408

Young, John P., 309

A 000018404